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STOCK TECHNICALS-HEROMOTOCO

Author: Srinivas Krishnan Bobba/Wednesday, December 2, 2020/Categories: Exclusive

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STOCK TECHNICALS-HEROMOTOCO

Hero Motocorp Ltd (NSE: HEROMOTOCO), formerly Hero Honda, is an Indian motorcycle and scooter manufacturer based in New Delhi, India. The company is the largest two-wheeler manufacturer in the world, and also in India, where it has a market share of about 46 per cent in the two-wheeler category. The 2006 Forbes list of the 200 World’s Most Respected Companies had Hero Honda Motors ranked at 108. On March 31, 2013, the market capitalization of the company was ₹308 billion ($4.3 billion). During the 1980s, the company introduced motorcycles that were popular in India for its fuel economy and low cost. A popular advertising campaign based on the slogan ‘Fill it – Shut it – Forget it’ that emphasized the motorcycle’s fuel efficiency helped the company grow at a double-digit pace since inception. In 2001, the company became the second-largest two-wheeler manufacturing company in India and globally. It maintains global industry leaders to date. The technology in the bikes of Hero Motocorp (earlier Hero Honda) for almost 26 years (1984–2010) has come from the Japanese counterpart Honda.

On the technical front, HEROMOTOCO has higher highs and higher lows on the daily charts and is currently placed above the long-term EMAs in the daily frame. In the recent past, after clocking a high of Rs3,395 level, the stock has witnessed a bounce and rallied to the current levels. At the current juncture, the stock has formed a base of around Rs2,900 level on the lower side and is all set to move higher. The overall chart structure of the counter looks bullish from current levels and is witnessing a bounce from the support zone around Rs2,985 level. This may trigger a fresh round of buying which may take the stock towards Rs3,550 plus level. The stock is currently performing in line with the broader markets indicating the inherent strength in the counter and is trading well above the major long-term support levels. On the Bollinger band (20,2), the stock price is trading above the mean with the upper band facing in the northward direction indicating the price likely to move higher. Analyzing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. On the oscillator’s side, RSI (14) is trading in a comfortable zone of above 50 levels indicating the intact bullishness in the stock. We expect the counter to continue its outperformance in the coming trading days as well and may move towards Rs3,700 level in the medium-term. Any correction towards the recent support levels of Rs2,985 level may be utilized to average the positions.

Srinivas Krishnan Bobba, Deputy Manager (technical research analysis) Karvy Stockbroking Ltd

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The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

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