Maruti Suzuki In the Fast Lane. Are You on Driver's Seat?

  • Stock Market Analysis

About the company:

Established in 1982, Maruti Suzuki (NS: MRTI ) India Ltd is a joint venture between the Government of India and Suzuki Motor Corporation (or SMC) Japan. It became a subsidiary of SMC in 2002. The company is the market leader in the passenger vehicle segment in India. The stock is trading at an 11.85% discount to its 52- week high level. The 52-week high and 52-week low range is Rs 8,400 – Rs 6,301.

Technical observations:

One-week time frame: (Chart 1)

On a weekly time frame, MSIL share is likely to form an Inverted Head and Shoulders pattern. The scrip has made an upward movement accompanied by higher volumes. Rs 7.500 remains as immediate resistance. The share is most likely to face strong resistance of Rs 7,750. We anticipate the company to break this resistance in the next couple of weeks. Relative Strength Index (or RSI) is above 55, and the Moving Average Convergence Divergence (or MACD) line crosses the signal line below. It signals a positive momentum on the stock. Long-term investors may enter at current levels. They should maintain a stop loss at Rs 6,590 (previous swing low) on a weekly closing basis.
One day time frame: (Chart 2)

On a daily time frame, from the below chart, you should observe that MSIL stock has been trading in a Falling Channel since June 25 this year. After making a low of Rs 6,600 on August 26, 2021, the stock consolidated and crossed over above the 50-day EMA line. Heavy volumes accompany this movement, and the RSI line is above 70, indicating positive momentum. Positional traders should enter on a pull-back and maintain a stop loss at Rs 6,742 on a daily closing basis.

We believe the Maruti Suzuki stock will maintain a positive bias and move higher in the subsequent trading sessions. Short-term traders should take a position at current levels and keep a strict stop loss of Rs 7,198 on a daily closing basis.

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