Watch out for TVS, Bajaj
Both the auto stocks could move up, but stick to stop-losses
TVS Motors
Current price: Rs 525
Target price: Rs 570
The stock has broken upwards from a recent trading range. Volumes have expanded with the breakout. There is the projected target of around Rs 570-575. However, this may take several weeks to achieve. Keep a stop-loss at around Rs 512. Expect sudden sharp volatility changes.
Bajaj Auto
Current price: Rs 521
Target price : Rs 545
The stock has just risen on high volumes after completing a bullish saucer formation. The robust quarterly results also improved the sentiments at the counter. The projected target would be around Rs 545. There is a bit of downside risk. The nearest reliable support is around the Rs 510 level and if that is breached the stock could react down to around Rs 488. It would be a very generous stop-loss around Rs 510.
CMC
Current price: Rs 597
Target price: Rs 650
The stock has risen out of a bullish formation with a high volume pattern. The normal projected target would be somewhere between Rs 650-665. Let's be conservative and suggest the taking of partial profits at around Rs 650 if that price level is attained. Once again, there is an element of risk. If the formation breaks down, prices could slide right back to the Rs 565 mark or even lower. This is a very loose stop-loss. Diurnal variations of +/- 30 is easily possible since this stock is volatile.
Ranbaxy
Current price: Rs 636
Target price: Rs 730
The stock has started a breakneck climb. The target projection looks fairly reliable on the basis of an excellent chart pattern and strong volumes. There is likely to be several sharp intra-day reactions, however, before the stock achieves those targets. Keep a stop-loss at around Rs 630. There is resistance around Rs 670 so book partial profits once that price is attained.
Siemens
Current price: Rs 323
Target price: Rs 305
The stock continues to show a strong turnaround. It has been moving up on a steep trendline of around 45 degrees. Look for a reaction in the recent future to around the Rs 305-310 range and then enter. It's difficult to project future targets from this pattern but the stock looks worth holding at least until the Budget.
