Auto Stocks Outlook for the week – 17 to 21.10.2016

Auto Stocks Outlook for the week – 17 to 21.10.2016 )

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Stocks of major automobile companies are seen trading in a narrow range next week, with
the possibility of some correction, as most of the stocks have performed well in the past few
weeks. However, the bias for the consumer discretionary sector remains positive due to
robust demand expected during the festival season.

Expectations of stellar sales in October, following robust growth in September, are set to
drive automobile stocks in the coming week. In September, overall sales of passenger
vehicles in the domestic market rose 19.92% on year to 278,428 units, the highest since
March 2012, when sales were at 295,403 units.

The CNX Auto index, which ended down 1.17% on week at 10223.45 points on Friday, might
see some correction over the next few sessions, though the bias remains positive.
Immediate support for the index is seen at 10000 points, but the interim bias may turn
negative if it breaches the strong support level of 9800 points. Resistance for the index is
seen at 10450-10500 points. The longer-term outlook for the stock, however, remains
positive, backed by strong fundamentals and a good order book.