Amara Raja, Minda: How to trade EV-related stocks ahead of Budget 2022?

Budget 2022 can spark much awaited upside in the EV related stocks

The auto industry will be looking forward for more incentives for the electric vehicles segment in the upcoming Union Budget 2022, as the government pushes towards use of green energy.

Meanwhile, while welcoming the Centre's policy announcements on the production linked incentive (PLI) schemes for ACC (advanced chemistry cell) battery, auto and auto components, and extension of FAME-2 scheme, the Automotive Component Manufacturers Association (ACMA) industry body urged the government for a uniform GST rate of 18 per cent on all auto parts to curb the impact of counterfeits in the aftermarket operations.

In its pre-Budget recommendations, ACMA asked the government to consider upward vision of RoDTEP (Remission of Duties and Taxes on Export Products) rates as the rate notified for the sector at 1 per cent or lower is inadequate to cover the incidence of unrefunded taxes and duties borne on export products.

With less than two weeks remaning for the announcement of the Budget, here's a trading strategy for select EV-related ahead of the mega event.

Amara Raja Batteries Limited (AMARAJABAT)
Likely target: Rs 700
Upside potential:   9%

The shares of Amara Raja Batteries has wtinessed a breakout of “Inverse Head and Shoulder” with the Moving Average Convergence Divergence (MACD) conquering the zero line upwards, as per the daily chart. This up move signals a rally in the direction of Rs 700 levels, which is the next crucial hurdle mark. The immediate support is positioned at Rs 625 levels.  CLICK HERE FOR THE CHART

Exide Industries Limited (EXIDEIND)
Likely target: Rs 195 and Rs 205
Upside potential:   5% to 10%

After successfully crossing the resistance of Rs 172-level, the stock price of Exide Industries Limited managed to close above the 200-day moving average (DMA) with strong volumes. This structure exhibits a bullish bias for coming sessions and any up move above Rs 185 level, may see a sharp surge in the direction of Rs 195 and Rs 205 levels. The immediate support for the stock lies at Rs 174 and Rs 168 levels. CLICK HERE FOR THE CHART
 
Tata Power Co. Ltd (TATAPOWER)
Outlook: Opportunities to add positions for long term outlook

While the chart structure of Tata Power indicates weakness and reluctance to cross Rs 250 level, the overall underneath sentiment is well protected with strong support of Rs 200 level. This seems quite far from the current price level; however the weak sentiment may provide opportunities to add positions for long term outlook. The subsequent support stands at Rs 230 level. The bigger outlook hints at a price target of Rs 300. CLICK HERE FOR THE CHART
 
NTPC Ltd (NTPC)
Likely target: Rs 150
Upside potential: 9%

The broader outlook for NTPC is supported by the 200-DMA, currently placed at Rs 121.90 level. Now, the stock managed to sustain above Rs 130-level, which is its 100-DMA, the gradual up move indicates the possibility of a rally towards Rs 150-mark, as per the daily chart. As long as the support of Rs 130 is held, any reversals may see sharp addition in longs. CLICK HERE FOR THE CHART

Minda Industries Ltd (MINDAIND) 
Outlook: May hit Rs 1,500 after crossing Rs 1,250

Since the mid-2020, the stock has rallied by building a strong support base. Every up move has seen relative weakness has been followed by a accumulation phase. The current level exhibit support base in the range of Rs 1,100 to Rs 1,050 levels and as long as this range is safeguarded, the reversal may see the next round of upside in the direction of Rs 1,500 level. The immediate resistance for the stock falls at Rs 1,250. CLICK HERE FOR THE CHART