Monday, March 2, 2009

INDIAN MARKETS Mar 2009 : AUTO SECTOR - BUYING OPPORTUNITIES

Auto Sector can claim to be at crossroads of breakout or breakdown. It has received all the impetus that it needed from Government and still it has yet to make a decisive move northwards. There is air of despondency in the market which may be holding it back. We can evaluate the fair chances of making profitable trade by adopting some conservative buying strategies. However for any buying at the present level, we have to keep strict vigil towards risk management in case things take a turn for the worst.

Tata Motors
A decisive close above 150 can easily take Tatamotors to 200, where some profit booking is expected. Once across 200 it is ready to sail to 310/315. However in case it breaks down below 130 then there is hell to pay. So the prudent thing will be to invest 50% at the present level and watch for events as they unfold. But below 130 one should be ready to exit from Tatamotors and look for a buy at 84.

Maruti
Maruti has already shown strength from its low of 433. Now Maruti should be considered for buying once it corrects itself. 615 should be a decent level to pick up Maruti. However one should be ready to invest more in case Maruti slips down to 515. So investors should put in 50% at 615 and be on look out for the level of 515 to pump in another 50% money.

M&M
M&M has to decisively conquer 330 to qualify for a breakout. In case it does so then it will face resistance only at 400. So investors can risk buying into it at present level but should exit from it once it breaches 260. Below 260 M&M will make a dash for 165 and hence investors should judiciously invest at present level of 311. Not more than 50% money should be invested now.

Hero Honda
In this gloom and doom, Hero Honda seems like a fairy tale. For the simple reason that the scrip is performing much above market, I have an apprehension for Hero Honda. It is trading at 930 which is near its historical high of 999. In fact it may again touch 999 but some how I am not comfortable with Hero Honda. I shall be more comfortable buying Hero Honda around 550/600.

TVS Motor
TVS motor closed at 19.35 on 27 Feb 2009 and is a candidate fit for buying. Above 20 it will qualify as a breakout story and will easily show 25 to 27 in trade. However below 16 it is very weak and hence some caution should be exercised. Nonetheless one shouldn't miss taking TVS motor in his portfolio at present level, albeit in measured quantity. In case it breaches 16 then buy at 11.