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We recommend a buy in the Apollo Tyres with a short-term perspective. From the charts of Apollo Tyres, we note that the stock has been on a long-term uptrend. It has been forming higher peaks and troughs since its June 2006 low of Rs 19.4. The stock reversed direction, to a medium-term downtrend from its January 2008 high of Rs 62.9 to its March low of Rs 35 touched recently. On March 25, Apollo Tyres gained almost 15 per cent by conclusively breaking through the medium-term trendline as well as 200-day moving average, accompanied by good volumes. With this breakthrough, the stock has resumed its long-term uptrend. The daily momentum indicator has entered the neutral region from the bearish zone and weekly momentum indicator has bounced back from 40 levels. Besides, the long-term up trendline is still in place. Our short-term forecast for the stock is bullish. We expect the stock to rally further to our target level of Rs 50 in the short-term. Investors with a short-term perspective can buy the stock with stop-loss at Rs 39.

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