Buy Apollo Tyres, may test Rs 350 in medium term: Dharmesh Shah
The share price of Apollo Tyres remains in a strong uptrend forming a higher peak and higher trough representing persistent demand at elevated levels.
The stock has formed an all-time high of Rs 307 during the middle of April 2018. The corrective decline from all-time high saw the stock to rebound and took support at major breakout area indicating resumption of the primary uptrend thereby providing a fresh entry opportunity.
Time-wise, the stock took just nine weeks to retrace its entire previous decline of 26-weeks from Rs 288 to Rs 228. Faster retracement of the major falling segment in less than half the time interval confirms the overall positive price structure and reinstates bullish momentum, which augurs well for the stock.
The stock has major support levels placed around Rs 260-265 as it is the confluence of the following technical parameters:
a) The lower band of the rising channel containing the entire up move since February 2017 around Rs 264
b) The long-term rising 50 weeks EMA, which has acted as strong support for the stock since August 2016
c) 61.8% retracement of the previous major up move (228-307) is placed around | 260 levels
We expect the stock to head higher towards Rs 350 in the medium term as it is the price parity of previous up move from Rs 230 to Rs 307 added to the recent trough of Rs 274 project upside towards Rs 350 levels in the medium-term.
Disclaimer: The author is Head Technical, AVP at ICICI Direct.com Research. The views and investment tips expressed by investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.