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Investors with a short-term perspective can buy the stock of Apollo Tyres at current levels . The stock gained 3.4 per cent with good volume on Tuesday, breaching a key immediate resistance at ₹168. With this rally, the stock appears to have resumed the near-term uptrend that has been in place since it registered a 52-week low at ₹144 in early August this year.
Following a short-term downtrend in the month of July, the stock found support at around ₹145 in early August and changed direction triggered by positive divergence in the daily relative strength index and price rate of change indicator. While trending up, the stock had decisively breached a key resistance at ₹160 in early August and moved sideways in a narrow band between ₹160 and ₹168 until recently. The upward breach of this band is positive for the stock. Also, it trades well above the 21-day moving average line.
Read : Apollo Tyres: Riding the slowdown
The daily RSI is likely to enter the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Besides, the daily price rate of change hovers in the positive territory implying buying interest. Short-term targets are ₹179 and ₹182.5 in the upcoming trading sessions. Traders can buy the stock with a stop-loss at ₹168.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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