Maruti Looking Buy On Dip!

As per the chart of Nifty Auto, the sector is in a negative trend. On the monthly chart, the index has given closing below the support and the next support is around 3150. All stocks of the auto sector are oversold however, we are expecting buy on dips. So personally I will prefer to go with Maruti on dips i.e. near the next support. Let's discuss the history and prediction base on the chart.

  

Monthly Chart: The stock has fallen almost 33% in the month of March and broken back to back two supports. If we see the last three months candle then each is in red i.e. stock is too much oversold. Recently many auto companies have declared their quarterly results and that was not good. Also, due to CORONA and lockdown result of the coming quarter maybe the same or more down. That is the reason we are expecting more fall in Maruti or auto companies. The next support is around 3200/3150 and we are expecting fast bounce back from these levels. That is the reason these are good levels to enter in Maruti.

Weekly Chart: If we see weekly chart then Spinning Top was on chart i.e. near-monthly support. In the next week stock has continued trend as “Drop Base Drop”. On weekly chart trend is negative.

Daily Chart: On a daily chart, we can clearly see trend i.e. “Lower Low & Lower High” and all of 3 DMA has crossed down. Now the sequence of DMA is 200, 50, & 20 i.e. negative.

Below are the things which I have noticed:

• Stock is trading below strong support
• Next strong support is 3170
• Fundamental of a company is good

I will wait for the next support and will make a decision base on the market situation.

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----------------------------------------------------------------------------------------------- Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.
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