ET NEWS

Shares of Hero MotoCorp have staged a sharp rally over the past two weeks, climbing 15.3% from the Rs 4,450–Rs 4,600 zone to trade above the Rs 5,100 mark. The upmove, backed by strong volumes, has reflected robust buying interest and positioned the stock near its recent swing highs, placed at the Rs 5,250 zone.The breakout has shifted market focus towards the next set of resistance levels, with technical indicators pointing to sustained strength but also hinting at overbought conditions.Analysts noted that the stock remains in a firmly bullish trend, trading above key moving averages, with higher levels on the horizon if current breakouts hold.Commenting on the technical setup, Shitij Gandhi, Senior Research Analyst (Technicals), SMC Global Securities, said, “HEROMOTOCO is currently trading around Rs 5,151 and has recently come out of a prolonged wide-range consolidation phase. From the lower levels, the stock witnessed a healthy bounce, consistently forming higher highs and higher lows. After a brief period of narrow-range consolidation, the stock gave a breakout, delivering nearly 12% returns, supported by optimism over the government’s proposal to reduce GST rates on the auto sector from 28% to 18%, which lifted auto stocks significantly.”He added that the consolidation phase had taken the shape of a Rounding Bottom on the daily timeframe. “If HEROMOTOCO manages to sustain this breakout, it could extend its up move towards higher targets in the range of Rs 5,600–Rs 6,000 from a holding perspective,” Gandhi said, while noting that the RSI at 76.06 indicated strong momentum but could also lead to a near-term cooling off through time-wise or price-wise correction.Hardik Matalia, Derivative Analyst, Choice Broking, also highlighted the bullish undertone, stating that the stock is trading comfortably above all its key moving averages.He said, “From a short-term trading perspective, traders can look for opportunities to buy on dips or on continuation of the upside move with a proper stop-loss, targeting immediate higher levels. For long-term investors, it is advisable to continue holding positions with a target zone of Rs 5,600–Rs 6,000. Any meaningful dips should be considered for accumulation, and as long as the stock remains above Rs 4,500, a buy-on-dips strategy can be maintained.”Adding to the technical view, Vatsal Bhuva, Technical Analyst at LKP Securities, pointed out a crucial breakout signal earlier this month. “On 7th August, the stock witnessed a strong breakout from consolidation along with an inverted Head and Shoulder breakout on the daily chart. Interestingly, on the monthly chart, the head of the inverted pattern was formed around the 61% Fibonacci retracement level, measured from the 2020 lows (1545) to the peak of 6201 recorded on 23rd September 2024. Following this breakout, coupled with a positive GST trigger, the stock has attracted heavy volumes, fueling a strong rally. The technical outlook remains bullish from current levels, with a mid-term target placed at 5500,” he said.Meanwhile, other analysts tracking the stock noted that immediate resistance lies in the Rs 5,150–Rs 5,170 zone, and a breakout above this range could extend the uptrend toward Rs 5,250–Rs 5,350. On the downside, stronger support is placed around the Rs 4,750–Rs 4,800 zone, with Rs 4,500 seen as a critical protective level for traders.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

India's private sector activity expanded at the fastest pace on record in August, powered by a historic surge in demand led by the dominant services sector, which allowed firms to hike prices at the fastest clip in over 12 years, a survey showed on Thursday. The explosive growth paints the picture of a booming economy and the accompanying surge in price pressures is likely to compel the Reserve Bank of India (RBI) to keep its policy restrictive for longer. HSBC's flash India Composite Purchasing Managers' Index (PMI), compiled by S&P Global, rocketed to 65.2 in August from 61.1 last month and far outpacing a Reuters poll median forecast of 60.5. This reading marked the highest level since the survey began in December 2005 and remained above the 50-mark that separates growth from contraction for the 49th fmonth. Record expansion was underpinned by the sharpest uptick in total new orders - a key gauge of demand - in nearly 18 years. International demand was particularly robust, with new export business growing at the fastest pace since composite data collection started in 2014. The services sector spearheaded this growth with its activity index soaring to a survey high of 65.6. The manufacturing sector also showed remarkable strength - its preliminary PMI rose to 59.8, its highest reading since January 2008. While this frenetic activity spurred the quickest rise in job creation since June, it also bestowed significant pricing power upon businesses. Faced with higher wage bills and raw material costs, companies passed on these increases to customers at the most aggressive rate since February 2013, citing strong demand as the key enabler for the mark-ups. Such a sharp increase in output charges could fuel broader inflation and diminish expectations for an RBI interest rate cut next quarter. Firms remained overwhelmingly optimistic, with sentiment for the year ahead strengthening to its highest since March.