Running On 'Auto' Mode

JC Parets
May 28, 2022

It's been about over a week that the market has churned sideways. In every sideways market move, there are some areas of strengths and weaknesses.

Currently, we're looking at a minor strength coming through in the Auto index. There have been some signs of this strength off late. But we're going to focus on just a few charts here to communicate what we're referring to here.

The Auto index has been moving sideways for longer, compared to the broader market. Presently, the index just about marked a new high since February this year.

We can see in the chart below that 10,400 has been a crucial support zone for the index. Bouncing off the same level, the price is now making a move towards its resistance near 12,130. In this move, certain stocks have displayed strength in the current market environment.

We're here to share those stocks with you!

Click on the chart to zoom in.

First up, is TVS Motors. The price is trading close to its six-month highs, in a messy market nonetheless! While the price was consolidating above the 61.8% Fibonacci zone, we are now looking at a dash towards the 755 level. The stock is getting out of a six-month base breakout with the indicator moving into strong bullish territory.

We are bullish above the level of 700 with targets of 755 and 815.

Next up, we're looking at Balkrishna Industries. The price is bouncing off the support zone at 1,930 and has recovered well so far. There was a minor breach of this support zone recently, but the price got right back above it. We're yet to see a bullish reading in the indicator pane. The price, however, is moving towards its resistance.

We are bullish above the risk management level of 1,930 with a target close to 2,700.

The last one on the list today is Mahindra & Mahindra. In a market where most stocks are making new lows, Mahindra and Mahindra is moving towards its all-time highs. In this scenario, the relative strength becomes quite clear. We're looking at a much bigger base breakout here. The price has been holding below its overhead supply zone of 993 for close to 4 years now!

With the indicator making a move towards the bullish territory, the price will find more support.

We are bullish above the risk management level of 993, with a target near 1,455.

These are the Auto stocks that are displaying strength at the moment and hence we have discussed only these. As and if more stocks join this bandwagon, you can be sure we'll share them with you too!

Are you invested in any of these stocks? Are you keeping an eye on the Auto sector?

Share your thoughts with us and please let us know if you have any questions.

Allstarcharts Team

Filed Under: