The auto index is changing gears. But will it outperform Nifty?

Market

When broader markets were correcting, the auto index hit a new all-time high.

In the market reversal from 15,200 to 17,800 for the Nifty50, some of the index heavyweight stocks witnessed a short-covering rally.

This boosted the Nifty50 and it outperformed against the Nifty Auto index in August 2022.

Accelerating the Momentum

As auto index is trending close to its all-time high after the breakout from multiple resistance levels (marked green on the chart).

The index has broken out from the breather in the form of a wedge pattern (black dotted lines on the chart).

Nifty Auto Index Chart

The Auto Index

The bulls are in control of the trend. The Nifty50 is heading to 18,000. This indicates the outperformance will continue. It’s just a matter of time.

Constituents of Auto Index:

  • Maruti Suzuki India Ltd.
  • Mahindra & Mahindra Ltd.
  • Bajaj Auto Ltd.
  • Hero MotoCorp Ltd.
  • Tata Motors Ltd.
  • Eicher Motors Ltd.
  • Motherson Sumi Systems Ltd
  • MRF Ltd.
  • Bosch Ltd.
  • Ashok Leyland
  • Bharat Forge Ltd.
  • TVS Motor
  • Exide
  • Amar Raja Batteries
  • Apollo Tyres

As the auto index outperforms and stock markets recover, the auto index may breakout to new all-time highs.

Also read: Cryptocurrency Prices Today: Bitcoin, Shiba Inu Fall While Ether, Dogecoin Gain

There are other reasons too apart from the technical ones which could trigger the next leg of growth in auto stocks. Read our editorial on why auto stocks are rising.

At present, the auto index is trading lower by 0.4% at 13,190 levels. From the index, Bharat Forge and M&M are the top losers.

If you’re interested in being part of my charting journey as I share how to create wealth from profitable trade setups, join my telegram channel – Fast Profits Daily.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. 

This article is syndicated from Equitymaster.com

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