Automobile stock may deliver 23% return – Trading at breakout level! Should you Buy?


Shares of a popular automobile company gained 14% in three days, and are now trading near breakout levels.

Having a market cap of ₹5,323 Cr, Jamna Auto Industries Ltd (NSE: JAMNAAUTO) has performed well in recent months rising by over 31 percent in the last four months.

Now, the stock has now crossed its 52 week high of 135.35 and made a high of ₹138.45. In the last two years, the stock was experiencing a consolidation phase and was unable to break its previous resistance.

The Stock broke out of its resistance of ₹135 last week supported by strong volume. Delivery volume for this company is high at 2.3x this week too, which shows the bullish moment may further continue.

Jamna Auto Industries have outperformed Nifty index by gaining an additional 11% compared to Nifty.

As per fibonacci projections, Jamna Auto can give an initial target of ₹142 , and if the move is sustained supported by overall market, we can see higher targets of ₹165 in coming weeks.

Reasons for bullish trade in Jamna Auto

  • Jamna Auto closed above its previous high of ₹133.45 and is now trading at a 1.7% higher price. This breakout is also supported by expanding volume.
  • The stock is trading near its 5 year high, which shows a long phase of accumulation. Usually, when stocks break’s out after accumulation, a strong bullish move can be expected.
  • RSI value have crossed 70 which indicates strong momentum buildup.
  • Shares of Jamna Auto have also closed above VWAP and above the upper bollinger band, showing signs of potential up move.
3.1/5 - (15 votes)

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