We recommend a buy in the stock of Apollo Tyres from a short-term perspective. It is seen from the charts of the stock that since bottoming out in early February at around Rs 44, it has been trending upwards. However, the stock encountered resistance at Rs 82 and started to decline.

After retracing 50 per cent Fibonacci retracement level of its prior up-move, the stock found support at Rs 64 and bounced up forming a bullish engulfing candlestick pattern (which is a bullish reversal pattern) on Tuesday. It has advanced four per cent and has managed to close above its 200-day moving average.

Moreover, the stock has a significant long-term support in the band between Rs 63 and Rs 65 which has cushioned the stock's decline. The daily relative strength index is on the verge of entering into the neutral region from the bearish zone and weekly RSI is featuring in the neutral region.

Considering that the stock formed a bullish engulfing pattern and is reversing higher from the key long-term support level, we are bullish on the stock in the days ahead. We expect its up-move to continue and reach our price target of Rs 72 or Rs 74 in the forthcoming trading sessions. Traders with short-term perspective can consider buying the stock with stop-loss at Rs 67.5.

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