Tyre stocks are forming the base since December 2021, and it seems something is cooking when I look at the technical structure.
We created an Equal Weighted Tyre Index (EQTI) to analyse the trend and performance of tyre stocks.
Here's an interesting update...
Did you know that tyre stocks are outperforming the broader market index Nifty 500 since April 2022?
The probable bullish head & shoulder pattern (marked in blue) is forming on daily chart with the current leg as right shoulder.
What caught my attention was the bullish pennant breakout (black) with volumes triggering an upward momentum.
As tyre is commodity driven sector, commodity prices have corrected over 20%. This is good news for commodity stocks and tyre companies.
A strong recovery in the auto sector also bodes well for tyre stocks. Auto stocks are rising. Read my update on why I think the auto index is on the verge of a multiyear breakout.
Traders and investors should keep the best tyre stocks on their watchlist and look for opportunities.
At present, from the list of tyre stocks, CEAT, Balkrishna Industries, MRF and Apollo Tyres are leading with gains.
If you're interested in being part of my charting journey as I share how to create wealth from profitable trade setups, join my telegram channel - Fast Profits Daily.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
Brijesh Bhatia Research Analyst and expert chartist, is the editor of Alpha Wave Profits. Fully committed to his craft, Brijesh has mastered the art of making money by trading using technical analysis. Brijesh has an MBA from ICFAI and 16 years of experience in India's financial markets. He began his career on Dalal Street as commodities dealer and it wasn't long before he developed his own unique trading system. Brijesh worked on his trading system until it could be expected to deliver 5 units of return for every unit of risk.
Equitymaster requests your view! Post a comment on "Is Something Cooking in Tyre Stocks? I Believe Tyre Stocks Can...". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!