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Risk-to-reward in favour of going long in select auto stocks: Aditya Agarwala of Yes Securities

The auto Index had run up quite significantly and was sitting in overbought territory, a correction in the sector should be considered healthy that will make room for the next leg of the upmove, says Agarwala.

March 29, 2021 / 07:32 AM IST
 
 
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Aditya Agarwala, Senior Technical Analyst, Yes Securities, says investors should closely track the spread of coronavirus infections in India and the US bond yields, which cooled off the previous week but a spike can lead to volatility in the market once again.

The analyst thinks that the recent correction in the auto index should be considered healthy, as it will make room for the next leg of the upmove. In an interview to Moneycontrol’s Kshitij Anand, Agarwal says 14,230-14,260 will act as key support for Nifty in the April series, below which correction of 14,000-13,930 can be triggered. Edited excerpts:


The Sensex and the Nifty50 fell by over 1 percent each in the week gone by. What led to the price action?
The weakness in the benchmark indices could be attributed to the fast-rising COVID-19 cases in India and fears of strict measures by the government to curb their spread, which could also include partial lockdowns.

Uncertainly on the magnitude of the spread of COVID-19 in its second wave kept traders jittery, forcing them to book profits.