Maruti, Bajaj Auto, M&M: Trading strategies for auto stocks as sales slide

Most auto stocks were trading weak on Wednesday on poor sales numbers for March as automakers were forced to suspend operations amid a nationwide lockdown to contain the spread of the coronavirus pandemic. Maruti Suzuki India Ltd (MSIL), for instance, reported 47 per cent year-on-year fall in its total sales during March to 83,792 units. Ashok Leyland and Eicher Motors, too, reported a slump in March sales figures.


Here is what technical charts suggest for Nifty Auto index and its key constituents.

NIFTY AUTO INDEX: The trend looks weak below 5,000 levels as per the daily chart. Although the current formation suggests consolidation with lower support around 4,600 levels, the overall trend remains weak. Despite the fact that the Relative Strength Index (RSI) rising upward in an oversold condition, the index needs to conquer significant resistance of 5,000 levels.CLICK HERE FOR THE CHART

Maruti Suzuki India (MARUTI): The counter is trading with “Lower high, lower low” formation as per the daily chart. This formation suggests Rs 4,750 is the immediate resistance on closing basis. Until this is not conquered, an upside may see substantial selling pressure. The RSI shows triple bottom in the oversold condition, and yet the price doesn't present any positive picture, which is a sign of concern. On the downside, Rs 4,200 level stays as a support. CLICK HERE FOR THE CHART
Bajaj Auto Ltd (BAJAJ-AUTO): The counter needs to close above Rs 2,060 levels for minimum of five trading sessions to confirm the upside momentum. This appears unlikely as the volume structure shows an average volume scenario. For a breakout, the counter must uphold high volumes and close with large positive candles. That’s said, the support remains at Rs 1,950 levels with selling pressure building in the range of Rs 2,050 to Rs 2,120 levels as per daily charts. CLICK HERE FOR THE CHART
Hero MotoCorp Ltd (HEROMOTOCO): The stock did scale Rs 1,800 levels amid market volatility, indicating a possible reversal. However, the selling pressure surpassed the buying strength, resulting in a correction towards Rs 1,600 levels. This suggests the counter is witnessing strong selling pressure at higher levels and is likely to see such resistance in coming sessions. On the downside, Rs 1,500 levels stays as a support. The overall trend indicates weakness bias as per the daily chart. CLICK HERE FOR THE CHART
Mahindra & Mahindra Ltd (M&M): There are firm resistances at Rs 312, Rs 340 and Rs 380 levels for this scrip. These levels need to be crossed for a decisive bullishness. The immediate resistance is at Rs 298 levels. The overall chart structure indicates selling scenario rather than any turnaround in price. Any upside towards Rs 300 levels may be used for shorting opportunities, as per the daily chart. CLICK HERE FOR THE CHART
Tata Motors Ltd (TATAMOTORS): A sharp decline towards Rs 63 levels has slowed down and the counter seems to be forming a consolidation pattern. It may swing between Rs 80 and Rs 60 in the coming trading sessions. However, till a confirmed breakout does not emerge on either side, one needs to be cautious, daily chart suggests. CLICK HERE FOR THE CHART