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