Why Bajaj Auto Should Be On Your Radar Today

The stock price of Bajaj Auto reached a high of Rs 9,357.95 in early April. Afterward, it entered a corrective phase, during which it declined by 7.66% over 15 trading sessions. Notably, the stock found support at a rising trendline formed by connecting the lows of February and March.

Bullish Signal on Friday

Last Friday, the stock formed a strong bullish candle, attempting to cross the 20-day moving average (DMA). Volume increased over the past two days, indicating growing buying interest. The stock closed at the resistance line of a sloping channel and near the 20-DMA, almost touching the 50-DMA before rebounding. This rebound signals a possible reversal.

Technical Indicators Suggest a Reversal

On the weekly chart, the stock of Bajaj Auto formed a hammer-like candlestick pattern, indicating a potential reversal. The Relative Strength Index (RSI) has broken out of its channel, with the daily 14-period RSI generating a buy signal by moving above its nine-period average, reinforcing the positive outlook. The Moving Average Convergence Divergence (MACD) line is also rising and close to giving a bullish signal. The Elder Impulse system has produced a strong bullish bar, and the Stochastic RSI has given a fresh bullish signal. Overall, these indicators suggest a possible reversal. A move above Rs 8,985 could lead to a test of Rs 9,265. A stop loss should be maintained at Rs 8,900.

April Performance and Quarterly Results

In April, the stock has underperformed, decreasing by 1.90%, while the Nifty Auto index increased by 3.23%. However, Bajaj Auto’s quarterly and annual financial results are encouraging. In Q4 FY24, Bajaj Auto reported a consolidated net profit of Rs 2,011 crore, with total income reaching Rs 11,914.9 crore, a 29.6% year-on-year increase. For FY24, net profit stood at Rs 7,708.25 crore, up 27% year-on-year, while revenue reached Rs 46,306.45 crore, a 23% increase year-on-year. This growth is driven by record sales of vehicles and spares.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.