TaMo, Maruti Suzuki: Auto stocks in tight spot amid diverse December sales

In December 2022, most automobile shares flaunted negative returns, with Tata Motors leading the pack, followed by Eicher Motors and Maruti Suzuki

Automobile company shares traded mixed on Tuesday as the December sales figures highlighted diverse trends. 

Ashok Leyland and Tata Motors reported a growth of 49 per cent and 10 per cent, respectively, on YoY (year-on-year) basis, while Maruti Suzuki and Eicher Motors registered declines of 9 per cent and 7 per cent in their December domestic sales. Hero MotoCorp and and Bajaj-Auto sales saw marginal gains of close to 2 per cent.

Shares of Bajaj Auto and Hero MotoCorp on Tuesday gained 1 per cent and 0.50 per cent, respectively, whereas Ashok Leyland and Maruti Suzuki India slipped in trade losing 1.15 per cent and 0.65 per cent each. 

In December 2022, most automobile shares registered negative returns with Tata Motors leading the pack by plunging 11 per cent, followed by Eicher Motors and Maruti Suzuki, which lost 7 per cent and 6 per cent each. 

Nifty Auto Index, too, lost 4.50 per cent that month. The index clocked a historic peak of 13,544.90 in November last year. For the calendar year 2022, Nifty Auto Index gained 15 per cent. 

Here’s the technical outlook of automobile shares amid the release of the December sales numbers:-

NIFTY AUTO

Outlook: Support is at 200-DMA

The Nifty Auto index has struggled to conquer the hurdle range of 13,600 -13,400 levels since September last year. This weakness has led the index to slip ground thereafter, breaching key support levels of 50-day moving average (DMA) and 100-DMA placed at 12,933 and 12,926, respectively. The following cushion is now set at 12,129-mark, which is its 200-DMA. Thus, as long as this cushion is defended, the index may attempt to overcome 50-DMA and 100-DMA obstacles. CLICK HERE FOR THE CHART

Tata Motors Ltd (TATAMOTORS) 

Outlook: Breach of 200-DMA could see further downside

There is a “Descending Triangle” formation in the weekly chart of Tata Motors shares, suggesting if the lower support-neckline is negated, the stock may enter long term bearishness. The neckline is at Rs 360-mark, which if taken out on a consecutive closing basis, the stock could slip to Rs 325 and Rs 300 levels. However, if the stock perceives accumulation near this neckline, which it observed three-times in the past could then show a smart recovery.  CLICK HERE FOR THE CHART

Ashok Leyland Ltd (ASHOKLEY)

Likely target: Rs 155 and Rs 160 (after taking out 100-DMA)

Upside potential: 3% to 7%

While the current daily formation of the Ashok Leyland stocks implies weakness, the support of 200-DMA is containing the selling pressure. At present, after taking a crucial support at Rs 140, its 200-DMA, the stock is making efforts to take out the immediate barrier of 100-DMA set at Rs 150.20. If this happens, the stock could breakout on the upside, heading towards Rs 155 and Rs 160 levels. CLICK HERE FOR THE CHART

Hero MotoCorp Ltd (HEROMOTOCO) 

Likely target: Rs 2,900

Upside potential: 4%

Shares of Hero MotoCorp are presently making efforts to break through the barrier of Rs 2,800, with aggressive volumes. Once Rs 2,800 is taken off, the trend would certainly head in the direction of Rs 2,900, which has served as a resistance since August last year. On the downside, Rs 2650 stays as a support which intends to maintain the trend buoyant, as per the daily chart. CLICK HERE FOR THE CHART

Maruti Suzuki India (MARUTI)

Outlook: Range bound trade

The “Double Top” formation on the daily chart of Maruti Suzuki shares indicates a downward trend. The immediate support comes to Rs 8,000 levels, and the hurdle is positioned at Rs 8,500 mark. If the stock fails to adhere the immediate cushion, the counter may see further decline to Rs 7,600-mark from a medium-term perspective. A breakout over Rs 8,500 could result in a swift up move towards Rs 8,800 and Rs 9,000 levels.  CLICK HERE FOR THE CHART