In the past week, some sectors have performed well. One of them was the auto pack. Going forward, what kind of strength can this particular sector show? What will your choices also be?
We are seeing a very interesting trend for auto stocks. It’s not just the past few days or weeks that we’ve seen auto stocks come to life. This process has been going on for three months.
Compared to February 2022 lows, these stocks have performed remarkably well. I think Mahindra & Mahindra was almost at 727.40 about three or four months ago and the stock is now in the four digits plus mark at a time when all markets and indices have had a very sharp correction in a huge phase of volatility.
thus has done remarkably well in this period of time. has done reasonably well and stocks like , have also done reasonably well. So it’s not just limited to one or two stocks. It’s the sector as a whole that’s doing quite well, or the majority of stocks in the sector that’s doing exceptionally well.
This is a sign that this strength should continue for the sector in the short to medium term. My choices remain M&M as well as Maruti. I think traders might consider buying on the dips in these two stocks.
“ Back to recommendation stories
There are two calls I want to suggest for the coming week. One of them is a buy call on BPCL. We could start to enter a strong recovery mode. On Thursday, BPCL showed a remarkable candlestick pattern, it was a strong indication of a breakout in terms of price, volumes as well as a strong change in terms of indicators for BPCL. I would expect this stock to start entering an outperformance mode and would recommend a buy on BPCL. The targets should be held at Rs 350 with a stop loss at Rs 317. The second would be a sell call on HDFC Ltd. Friday’s title experienced a very strong repression from the opening. It opened down 1.5%, but throughout the day the stock saw constant selling pressure. I feel it has to do with the bigger institutional hands selling the stock and with that selling pressure HDFC has opened one more leg down and could probably move into another corrective mode suggesting a sell off with the target of Rs 2,125 stop loss at Rs 2,225.