Technical Analysis

Tech Query: Outlook for Eicher Motors and Bajaj Finance

Yoganand D. BL Research Bureau | Updated on June 26, 2021

I am having the stocks of Eicher Motors at ₹2,350 and Bajaj Finance at ₹4,300. Please advise regarding their long-term prospects.

S Sankaran

Eicher Motors (₹2,721): The stock of Eicher Motors met with a key resistance at ₹2,800 in early June and started to move sideways below this resistance level. The near-term trend has been sideways since early June in the band between ₹2,650 and ₹2,800. A fall below the lower boundary at 2,650 can pull the stock lower to ₹2,530 levels. A further fall below this base level can drag the stock lower to ₹2,400 levels over the short to medium term.

On the upside, if the stock makes a progress above the vital resistance level of ₹2,800, it can push the stock northwards to ₹2,875 and then to ₹3,000 levels over the medium term. A decisive breakthrough of the long-term resistance at ₹3,000 will strengthen the uptrend and take it higher to ₹3,250 levels.

The long-term trend is up for the stock. As long as it trades above the significant support in the band between ₹2,000 and ₹2,050 the long-term uptrend will stay valid. A conclusive fall below the key medium-term base level of ₹2,400 can pull the stock lower to ₹2,275 and then to ₹2,200 levels. You can consider booking partial profit if the stock falls below the immediate support level of ₹2,650 and repurchasing at lower levels.

Bajaj Finance (₹6,074.6): The stock of Bajaj Finance tests a near-term barrier at ₹6,200 levels. Since the stock took support at ₹4,362 in mid-April this year, it has been in a short-term uptrend. As long as the stock trades above the vital support level of ₹5,250 the short-term uptrend will remain in place. A conclusive decline below this support will alter the uptrend and drag the stock lower to ₹5,000 and then to ₹4,750 levels.

On the upside, a strong break above ₹6,200 can take the stock higher to ₹6,400 or ₹6,500 levels over the short term. You can consider taking partial profit off the table if the stock fails to move beyond ₹6,200 levels. The long-term uptrend that has been in place since the stock found support in the March 2020 low of ₹1,783 will remain intact as long as the stock trades above the key base level of ₹3,700 levels. Key supports below ₹4,750 levels are placed at ₹4,500 and then at ₹4,000 levels.

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Published on June 26, 2021

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