Auto sector is the one to focus on for the traders! Here’s why

Auto sector is the one to focus on for the traders! Here’s why

by 5paisa Research Team Last Updated: Oct 28, 2022 - 09:57 pm 11.2k Views

Nifty Auto has jumped 4% during Diwali week

As the global sentiment remains fragile, it is utmost important for traders to be in line with market’s changing dynamics. Sector rotation is strongly focussed, and timely profit booking is a must for profitable trading in such scenarios. Meanwhile, as we see that the performance baton is being regularly shifted among various sectors, it is important to analyse which sector is outperforming the broader market at given point of time. That being said, the Auto sector has seen fresh buying interest as Nifty Auto becomes one of the top performing sectoral indices this week. Nifty Auto has jumped 4% during the Diwali week as it breaks out form its consolidation pattern. 

Technically, the index had been consolidating for about 20 trading sessions before witnessing a strong breakout. With this, it currently trades near its all-time high level of 13421.60.  Interestingly, it recently registered a multi-year breakout in July, which was followed by a consolidation. Thus, such breakout is considered quite positive. Also, it trades above all its key moving averages and all the moving averages are in an uptrend. The 14-period daily RSI (64.10) is in the bullish territory and indicates strong strength. The MACD line has surged above the zero line and remains bullish. The +DMI is well above -DMI. On the weekly timeframe, the elder impulse system has indicated a fresh buy. The Relative Strength (RS) is above zero and shows relative outperformance against the broader market. The TSI and KST indicators are also in line with these bullish technical parameters. Overall, the sector is likely to outperform given its bullish and is the one that should be in focus for upcoming weeks.

On YTD basis, Nifty Auto has delivered extraordinary returns of over 20% and is one of the top performers among the sectoral indices this year. The Auto companies have declared good earnings despite rising raw material costs and shortage of chips. Also, they expect the robust growth to continue in upcoming quarters. Don’t forget to add auto stocks in your watchlist!


How do you rate this article?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.


Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial. Also, The

Open Free Demat Account

Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number