Maruti, Tata Motors: Auto stocks showing positive trend reversal on charts

The Nifty Auto index hogged the limelight in Tuesday's session as it emerged the best performing sector index. The auto pack, with a gain of nearly 2 per cent, also outperformed benchmark Nifty50 (up 0.70 per cent), with 14 of the 15 constituents trading in the green in the early afternoon session.

Maruti Suzuki was the top-performing index stock as it rose over 4 per cent after the company said it would be raising vehicle prices in the July-September quarter (Q2FY22) to pass on higher input costs. CLICK HERE FOR THIS STORY

The Nifty Auto index has seen a decline of over 6 per cent recently, with market sentiment staying light. However, the long-term trend has been bullish and continues to stay upward until the major supports are not broken.

That said, analysts tracking the space also expect the 'pent-up demand' story to play out from the second quarter of the financial year 2021-22 (Q2FY22) as states unlock. Furthermore, pick up in vaccination pace also holds the key for a revival in the auto space, they said.

Amid this backdrop, here is how other the Nifty Auto index and select auto stocks look on charts:

NIFTY AUTO INDEX
Likely target: 10,700 and 10,820
Upside potential: 1.45% and 2.40%

The index has firm support at 100-day moving average (DMA) that is currently placed at 10,278 levels. The current momentum reflects a reversal near the support and movement towards the immediate resistance of 10,700 and 10,820 levels. As long as the index holds the support of 100-DMA, the upward bias may see aggravated momentum ahead. CLICK HERE FOR THE CHART

 
Bajaj Auto Limited (BAJAJ-AUTO)
Likely target: Rs 4,380 and Rs 4,450
Upside potential: 4% and 6%

With a positive crossover of 50-DMA and 100-DMA, the counter is indicating a positive outlook for the coming sessions. The stability above Rs 4,200 mark may further build a positive upside move towards Rs 4,380 and Rs 4,450 levels, as per the daily chart. The Relative Strength Index (RSI) has made a positive crossover around 5 value, suggestive of a positive strength in the price action. The immediate support comes at Rs 4,100 and Rs 4,050 levels. CLICK HERE FOR THE CHART
 

Maruti Suzuki India (MARUTI)
Likely target: Rs 7,425 and Rs 7,550
Upside potential: 4% and 6%

This counter needs to close above 200-DMA placed at Rs 7,147 levels as a strong close above this resistance could lead to a further upside towards Rs 7,425 and Rs 7,550 levels, suggests the daily chart. A gap up close on June 22, 2021, may indicate a firm underneath strength in the stock price. The immediate support comes at Rs 7,060 and Rs 7,030 levels. CLICK HERE FOR THE CHART
 
Hero MotoCorp Ltd (HEROMOTOCO)
Likely target: Rs 2,970 and Rs 3,100
Upside potential: 2% and 5%

From a broader perspective, this counter has a stiff resistance at 200-DMA. That said, the firm support of 50-DMA is holding the upside bias. The stock did breach the support, however, it failed to see a follow-up selling pressure. The current reversal indicates a move to fill the gap-down range of Rs 2,970-2,958. The next resistance comes at Rs 3,100 levels, as per the daily chart. CLICK HERE FOR THE CHART

Tata Motors Ltd (TATAMOTORS)
Likely target: Rs 350-Rs 360
Upside potential: 3% - 5.50%

The next big breakout for this counter is above Rs 360 levels, as per the daily chart. The current reversal nearing the earlier support of Rs 330 level suggests a rally towards Rs 350-360 range. The price action is in favour of the bulls as long as the Rs 330 support is held firmly. The overall trend indicates a positive reversal with the sentiment staying in favour of an upside. CLICK HERE FOR THE CHART