Automotive Axles

We recommend a buy in Automotive Axles from a short-term perspective. It is apparent from the charts of Automotive Axles that after recording a multi-year low of Rs 70 in early March, the stock reversed its trend. Since then, the stock has been on an intermediate-term uptrend. Following a minor correction to the support level Rs 130, it resumed the uptrend. On June 22, the stock gained 6 per cent, reinforcing the bullish momentum. Further the stock surged almost 6 per cent, accompanied with above average volume on June 29. The stock is trading well above its 21- and 50-day moving averages. The daily and weekly relative strength indices are on the verge of entering the bullish zone. The weekly moving average convergence and divergence indicator are entering the positive territory. The intermediate-term uptrend line is intact. We are bullish on the stock. We expect it to continue its rally until it hits our price target of Rs 167. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 143.

via BL