Price hike puts auto stocks in fast lane
Published On: Tuesday, January 19, 2021 | By: Team KnowMyStock
Equity markets in India bounced back today(19th January 2021), nursing losses of the past two days, on strong global cues. The nifty Auto index gained 1.5 percent on the National Stock Exchange (NSE) to hit an intra-day high of 10,113.5. Among individual stocks, Tata Motors jumped as much as 4 percent on the NSE, followed by gains in Ashok Leyland, TVS Motors, Bajaj Auto, and Maruti Suzuki that gained between 1 percent to 3 percent. Yesterday, Maruti Suzuki increased the price for select models by up to Rs 34,000 to offset the adverse impact of rising input costs. With this, India's largest car-maker joins the likes of Mahindra & Mahindra and Tata Motors who have already hiked prices owing to higher input costs. That said, the same uptick in input cost may hurt auto firms' Q3FY21 earnings, analysts say. This is how auto stocks faring on technical charts:
NIFTY AUTO INDEX: After the formation of "Inverse Head and Shoulder" pattern, the index experienced a tremendous bullish momentum, weekly chart suggests. This sentiment is still intact withy any correction looking as an opportunity to enter long positions.
The overall trend is moving towards 11,000 with a support of 9,800 and 9,500 levels. While, the weekly Relative Strength Index (RSI) trades in an overbought condition, the index is not exhibiting extreme weakness.
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