These three auto stocks could hit top gear this Diwali
Subscribe to enjoy similar stories. The festive season kicked off with Ganesh Chaturthi in September, and with Diwali around the corner, the automotive sector can expect a surge in demand. Historically, this period has seen a significant uptick in vehicle sales as consumers buy new cars and bikes in droves.
With the equity markets maintaining a long-term bullish trajectory, recent short-term corrections present a prime opportunity for investors. The Nifty50 index has dipped about 5% from its recent highs, while the Nifty Auto Index has fallen by around 10%. Let us first analyse the Nifty Auto Index before heading to the three stocks.
A technical analysis of the index reveals a bullish AB=CD harmonic pattern, indicating a potential reversal after the recent downturn. This pattern typically signifies a shift in momentum, suggesting that the dip may have reached its nadir and the index is primed to resume its long-term upward trend. The index's position near a robust support line further reinforces this outlook, hinting that bullish sentiment is gaining traction.
Also read: A veteran trader reveals how to supercharge your investment profits Additionally, the index has tested the 100-day exponential moving average (100DEMA), which is instrumental in defining short-term trends. The convergence of these technical indicators presents a favourable environment for a potential recovery in the sector. Against this backdrop, let us analyse three auto stocks that stand out as potential leaders in driving the index higher.
Maruti Suzuki, India's largest automobile manufacturer, exhibits a similar bullish AB=CD harmonic pattern on its chart. This setup appears at a support zone, signalling a potential reversal of its trend. These key
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