Apr 16, 2018

CEAT LTD : Short Term Trading View And Some Words On Tyre Stocks


CEAT LTD: cmp 1611

The tyre stocks had been in an upswing before the recent Trump Tariff Tantrum correction set off in markets. However after about couple of months in that, it looks like we are all set to see new buying and upmoves in selected sectors again. One of them seems to be tyre stocks.
They have got the push to get out of the correction or consolidation by the falling rubber prices, the decision of Indian government to levy import duty on rubber and the huge brand value and investor favouritism created in tyre company such as MRF.
CEAT has been lagging in picking up with its other peers like Apollo Tyre and MRF which are almost now making new highs. CEAT, which also once played on the tunes of the sectoral theme with its peers has been slow in responding the rise in the peer group stocks and still down about 20% from its highs. One of the reason may be the not so exciting results in the previous quarter.
However, it looks like it is consolidating and likely to give good spurt on the upside with first target of 1700 and then reach its old highs of 2000.
We do not look tyre stocks as commodity business such as sugar, and all metals. Why? Because they have not behaved in that fashion. They have more behaved like a consumer and brand businesses. So, the point is for the medium and long term investors also this stocks are not a threat. History has good evidence of our argument.
A delivery trader can buy in spot, or try to trade with call options for april, or may or keep an eye to take a good entry price and gain on an almost sureshot move on the upside.

0 comments:

Post a Comment