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We recommend a sell in Apollo Tyres at current levels. It is evident from the weekly chart of Apollo Tyres that it has been on a long-term uptrend since June 2006 trough of Rs 20. However, the stock met with a key resistance around Rs 42 in mid-September and has been declining since then. The stock’s short term decline from Rs 42 has retracted 50 per cent of its prior uptrend. During this decline, the stock has breached the 21- and 50-day moving averages. The daily m omentum indicators are showing signs of short-term bearishness. The nearest support for the stock is Rs 34 and the subsequent support is at Rs 31. Short-term investors can sell the stock at current levels with stop loss at Rs 39. We expect the stock to decline to Rs 34, then to Rs 31.

BL Research Bureau

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