Auto stock in focus: Maruti Suzuki India Ltd

The stock of Maruti Suzuki India has soared over 3% on Wednesday and is one of the top gainers among Nifty stocks.

The Auto index is up by 1.8% today supported by Maruti Suzuki and other auto stocks. It has a strong sectoral presence across the country and is a leading car manufacturing company having the greatest number of sales. The company has reported decent fundamental numbers which indicate a strong footing in the industry.

In the past one month, the stock has generated over 12% returns while one-year performance stands at a decent 16%. The stock has outperformed the sector and most of its peers during the period.

The stock is technically bullish. It has taken out its short term resistance level of Rs 8800 today and has surged about 1% above it. Moreover, the stock is within the touching distance from its all-time high of Rs 8971. It has formed a strong bullish candle with its open being equal to the day’s low. It was in a consolidation range of 8400-8800 for the past seven days. Today, the stock has recorded an above-average volume greater than 30-day and 50-day average volume. This highlights larger participation in the stock. The technical parameters suggest strong bullishness, with a 14-period daily RSI inching towards 70. The trend indicator ADX is well above 25 indicating a strong uptrend of the stock. Daryl Guppy’s multiple moving average is inclined towards strong bullishness. The Mansfield Relative Strength indicator suggests the outperformance against the broader market.

The derivatives data also hints towards strong bullish sentiment among the market participants as near-the-money Puts are aggressively sold while the calls have been covered. 8000 put option is aggressively sold which indicates that 8000 is likely to be held for this expiry and will act as good support for the stock.

Short term traders and medium-term investors can consider the stock to be included in their portfolio considering the ongoing bullishness.

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