Nifty Auto tests 200-DMA; TaMo, Maruti can rally up to 11%, charts show

The Nifty Auto index is slowly inching towards 200-DMA; above which the index can gain up to 4 per cent.

Shares of automobiles companies were seen trading with strong gains on Tuesday as the benchmark indices BSE Sensex and Nifty 50 recovered from a six-day losing streak.

Eicher Motors rallied nearly 3 per cent followed by TVS Motor Company, Maruti Suzuki and Tata Motors, which gained over 2 per cent each in early deals on Tuesday so far. The overall sentiment for the automobile stock seems to gain interest as the maximum stocks in Nifty Auto trade in green.

The Nifty Auto index too is slowly inching towards its 200-day moving average (DMA) and seems to be ahead of its counterparts like Metal, Nifty Bank, IT and Pharma indices in doing so.

Here’s an outlook on automobile sector and select stocks going ahead:- 

NIFTYAUTO

Likely target: 11,300 (after crossing 200-DMA)

Upside potential:  4%

While the overall structure on the daily chart exhibits weakness and a negative bias, the recent scenario suggests a possible reversal. The Nifty Auto index managed to hold the last reversal mark of 9,226 level and further sustained above 10,000 in the recent correction. The present momentum and strength indicates a rally towards 10,835 mark, its 200-day moving average (DMA) and upon crossing this obstacle with decisive volumes, the index could head in the direction 11,300 mark. CLICK HERE FOR THE CHART

Eicher Motors Ltd (EICHERMOT)

Likely target: Rs 2,800 and Rs 2,900 

Upside potential: 4% to 7.50%

Since January 2022, shares of Eicher Motors have gone sideways and consolidated in a broad range of Rs 3,000 to Rs 2,200 levels. The positive side of the stock is its ability to hold the 200-weekly moving average (WMA) support, currently placed at Rs 2,228. In addition, the stock is holding the gap-up area of Rs 2,494 to Rs 2,483 for the current week and continues to scale towards Rs 2,800 and Rs 2,900 levels, its imminent hurdles, according to the daily chart. CLICK HERE FOR THE CHART

TVS Motor Company Limited (TVSMOTOR) 

Likely target: Rs 740 and Rs 780 (after crossing Rs 700)

Upside potential: 5.50% to 11%

The formation of an “Inverse Head and Shoulder” hints that there is a positive bias underneath the stock, shows the daily chart. A breakout above Rs 700 could instill a strong up move which can see Rs 740 and Rs 780 levels.  In addition, the Moving Average Convergence Divergence (MACD) is inching to cross the zero line, when it does crosses it, the momentum could see added interest from market participants. The immediate support for the stock exists at Rs 640. CLICK HERE FOR THE CHART

Tata Motors Ltd (TATAMOTORS)

Likely target: Rs 460 

Upside potential: 10%

This is the second time, that shares of Tata Motors have showed reversal near the breakout range of Rs 355 to Rs 345 witnessed in October 2021. While the stock does trade under its 200-DMA placed at Rs 425.80 level, the sharp gap-up reversal in last two days, signals a possible upside, as per the daily chart. The immediate reach is its 200-DMA and upon conquering of this hurdle, the stock could jump to Rs 460 mark. CLICK HERE FOR THE CHART

Maruti Suzuki India (MARUTI)

Likely target: Rs 7,800 and Rs 8,000 (after crossing 200-DMA)

Upside potential: 3.50% to 6.50%

After falling under its 200-DMA at Rs 7,535 mark, the stock did form a “Death Cross” with a breakdown mark at Rs 7,062. The present pull back displays a short-term bounce, however if this reversal conquers the 200-DMA and manages to sustain above it, then one can expect a rally in the direction of Rs 7,800 and Rs 8,000 levels, shows the daily chart.  CLICK HERE FOR THE CHART