Apollo Tyres: deep correction in uptrend

| July 9, 2014 | India
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Company profile: Apollo Tyres Limited manufactures tires and tubes for cars, trucks, farm equipment and light commercial vehicles. The Company also manufactures automobile flaps and retreading materials.

A difficult to trade zig-zag correction is expected before things cool down in the 144-142 area. Such a correction could easily take 2-3 months and is best left alone until over. Keep in mind that the primary trend is still very much bullish and only challenged below 135-ish.

Protect existing longs or partially close positions to re-enter after the correction ends.

  • Primary trend: neutral
  • Outlook: negative < 77.70
  • Support: 77.70 / 62.05* / 51.00
  • Resistance: 92.50 / 102.45

Weekly chart Apollo Tyres

apollotyre_9jul2014

1 February 2014

The long-term trend line of 2009 has been breached a while ago. The ensuing recent pull back has left a new lower peak on the chart, thus forming the right shoulder of a Head&Shoulder reversal pattern. A break below the neck line at 77.70 triggers a new primary down trend towards 62.05. Below that, a broad support zone comes in around 51. Sell the breakout with initial stops above 92.50.

  • Primary trend: neutral
  • Outlook: negative < 77.70
  • Support: 77.70 / 62.05* / 51.00
  • Resistance: 92.50 / 102.45

Weekly chart Apollo Tyres

apollo_1feb2013

 

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Category: India