Last week, auto sector made a heroic attempt to recover from their lower levels. Among the index heavyweights, Hero Honda also rose to the upper channel of the trading pattern.
The stock has been on an uptrend since January 2009, bouncing off from the levels of Rs750. Last month’s increase in stock price came on back of lower volumes.
Given the current weakness across the auto space, the stock is more likely to retrace to the levels of Rs890and below in the next few sessions. Our view is well supported with daily RSI, which is indicating a downtrend.
Traders should look to SELL at the current levels and also on rallies to resistance levels of Rs945 levels. A stop loss of Rs952 is recommended on all short positions.