The stock of Apollo Tyres jumped 6.8 per cent accompanied by extraordinary volumes on Friday, emphatically breaking above a key resistance at ₹118.
Moreover, it surged almost 14 per cent backed by good weekly volume in, the past week.
Investors with a medium-term perspective can use this opportunity to buy the stock at current levels.
Since registering a 52-week low at ₹73.5 in late March this year, the stock had changed direction, and has been on a medium-term uptrend, forming higher peaks and higher troughs.
But the stock encountered a key resistance at ₹118 in early July and had been on a corrective decline until late July. Thereafter, it took support at around ₹105 where the 50-day moving average also provided base, and the stock continued to trend upwards.
Now, it trades well above its 21- and 50-day moving averages.
The daily relative strength index (RSI) features in the bullish zone and the weekly RSI is trending upwards in the neutral region. Moreover, the daily as well as the weekly price rate of change indicators are hovering in the positive terrain, implying buying interest.
Also, there has been an increase in daily volume over the past four trading sessions. With the recent conclusive breakthrough of the key resistance at ₹118 and the indicators backing the bullish momentum, the medium-term outlook is bullish for the stock.
It has the potential to trend upwards and reach the price targets of ₹135 and ₹145 with a minor pause at around ₹140.
Investors can buy the stock with a stop-loss at ₹113.