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The stock of Apollo Tyres gained 4.5 per cent accompanied by extraordinary volumes, breaching a key resistance at ₹187 on Wednesday. Moreover, the stock has conclusively breached its 21-, 50- and 200-DMA compression at around ₹184. This provides a good buying opportunity to traders with a short-term perspective.
After a short-term downtrend in the months of October and November 2016, the stock found support at ₹175 in late November. Subsequently, the stock started moving sideways and has been on a short-term consolidation phase in the range between ₹175 and ₹200. The stock now faces a key resistance ahead at ₹200. Both the daily as well as the price rate of change indicators are featuring in the positive territory implying buying interest.
The stock has potential to surpass the immediate resistance and reach the price target of ₹202 and ₹206 in the ensuing trading sessions. Buy the stock with stop-loss at ₹190.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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