Auto Stocks Outlook for the week - 07 to 11.11.2016
Stocks of major automobile companies are likely to fall further next week in line with the broader
indices, with the market bias increasingly turning negative in the short term. In the longer term,
however, the outlook for the sector remains positive as higher pay for government employees and
good monsoon rains this year continue to keep the demand outlook robust even after the just- concluded festival season.
In September, ahead of the festival season, total sales of passenger vehicles in the domestic market
had risen to 278,428 units, the highest since March 2012, up 20% on year.
The CNX Auto index, which ended down 1.85% on week at 9870.75 points on Friday, may fall
further over the next few sessions. The initial support for the index is seen at 9800 levels and if it
breaches that level, a strong support is seen at 9550-9600 levels. Resistance for the index is seen at
10000-10500 levels.
Maruti Suzuki India Ltd, which has been trading in overbought category for the last few weeks, is
looking weak on the charts and is likely to see further correction. The stock may find strong support
at 5,300-5,400 rupees, while resistance is expected at the 5,800-rupee level.
Tata Motors Ltd, which had a strong run in the last few weeks before correcting in the last few
trading sessions, is seen trading in a narrow range.
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indices, with the market bias increasingly turning negative in the short term. In the longer term,
however, the outlook for the sector remains positive as higher pay for government employees and
good monsoon rains this year continue to keep the demand outlook robust even after the just- concluded festival season.
In September, ahead of the festival season, total sales of passenger vehicles in the domestic market
had risen to 278,428 units, the highest since March 2012, up 20% on year.
The CNX Auto index, which ended down 1.85% on week at 9870.75 points on Friday, may fall
further over the next few sessions. The initial support for the index is seen at 9800 levels and if it
breaches that level, a strong support is seen at 9550-9600 levels. Resistance for the index is seen at
10000-10500 levels.
Maruti Suzuki India Ltd, which has been trading in overbought category for the last few weeks, is
looking weak on the charts and is likely to see further correction. The stock may find strong support
at 5,300-5,400 rupees, while resistance is expected at the 5,800-rupee level.
Tata Motors Ltd, which had a strong run in the last few weeks before correcting in the last few
trading sessions, is seen trading in a narrow range.
