This dividend-paying auto company posts strong sales growth; Hits a 52-week high in the process

This dividend-paying auto company posts strong sales growth; Hits a 52-week high in the process

Indian Market
by 5paisa Research Team Last Updated: 2022-09-01T16:33:17+05:30

Bajaj Auto has hit a fresh 52-week high amid strong sales growth in August.  

After Indian indices witness a strong gap-down opening, the auto sector saw robust demand at lower levels and has become the top performing sector despite the weak market. Bajaj Auto has soared nearly 2% after the gap-down opening after the company declared strong sales in August. Total sales rose to 4.01 lakh units, which is a rise of 8% from selling 3.73 lakh units on a YoY basis. The company expects strong growth in market share in September. Along with this, it recorded the highest ever sales growth for Bajaj Platina, which is truly positive.

The shares of Bajaj Auto have hit a fresh 52-week high level of Rs 4129.75 on NSE. The volume turned out to be above average and greater than the 10-day average volume. After consolidating for about 11 trading sessions, the stock looks set to trade higher in near future. It has bounced from its 20-DMA level, which has acted as a strong support level in the past. Moreover, the technical parameters suggest strong strength in the stock. The 14-period daily RSI (61.35) is in the bullish territory, and above its prior swing high. The ADX has broken out from the falling trendline pattern and is expected to move higher, indicating a strong uptrend. Overall, the stock is technically bullish and is expected to test higher levels.

The immediate resistance is placed at Rs 4200 levels, followed by Rs 4500 level in the medium term. One can maintain a stop loss at a 50-DMA level of Rs 3930. Besides, the company has considered buying back shares worth Rs 2500 crore with a price not exceeding Rs 4600 per share. On a YTD basis, the stock has soared over 25%, outperforming some of its peers. Investors can bet on this healthy growing auto stock for the medium term which also pays a strong dividend yield of over 3%. Include it in your watchlist to track its further development!

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