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We recommend a buy in the stock of Apollo Tyres from a short-term perspective. It is apparent from the charts of the stock that its medium-term downtrend that started from its all-time high of Rs 102 registered in September 2012 was arrested in the significant support band between Rs 78 and Rs 80 last November. Since then, the stock has been on a medium-term uptrend.
The stock took support around Rs 83 and continued its up move in the previous week. It has gained 3.6 per cent in the past three trading sessions. Moreover, the stock appears to have breached its moving average compression (21-, 50- and 200-day moving averages) at Rs 86 levels. The daily relative strength index has entered the bullish zone from the neutral region and weekly RSI is moving higher in the neutral region.
The daily moving average convergence divergence indicator has signalled a buy and is on the brink of entering the positive territory from the negative territory. Both daily and weekly price rate of change indicators are featuring in the positive area implying buying interest. We are bullish on the stock from a short-term perspective. We anticipate its rally to prolong and reach our price target of Rs 93 or Rs 95 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 87 levels.
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