Auto Stocks Outlook
for the week – 15 to 18.11.2016
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Stocks of major automobile companies are likely to fall
further next week, with little chance of a
pullback, as the bias remains negative, in line with the
broader indices.
In the longer term, however, the outlook for the sector
remains positive because the
implementation of the Seventh Pay Commission's
recommendations and good monsoon rains this
year continue to keep the demand outlook robust.
On Monday, the markets will be closed on account of Guru
Nanak Jayanti. In October, overall sales of passenger vehicles in the domestic market rose to 280,677
units, the highest since March 2012 and
up 4.5% on year.
The CNX Auto index, which ended down 5.7% on week at 9308.30
points on Friday, might fall
further over the next few sessions. Initial support for the
index is seen at 9150 levels and if it
breaches that level, strong support is seen at 9050.
Resistance for the index is seen at 9666-9725
levels.
Maruti Suzuki India Ltd, which has been trading in
overbought category for the past few weeks,
looks weak on the charts and is likely to see further
correction. Another one expect Mahindra &
Mahindra Ltd consolidating at current levels, as the stock
has been underperforming its peers over
the last few months.