Bajaj Auto shares halt 4-day winning run, slip 2% today; should you buy, sell or hold?

Shares of Bajaj Auto slipped more than 2 per cent on Monday, pausing their upward move of four consecutive sessions. The stock fell 2.45 per cent to settle at Rs 3,841.15 today over its previous close of Rs 3,937.70. Around 16,000 shares changed hands today on BSE, which was lower than the automaker's two-week average volume of 22,000 shares. Turnover on the counter stood at Rs 6.15 crore, commanding a market capitalisation (m-cap) of Rs 1,11,119.83 crore. There were 2,396 sell orders today against buy orders of 524 shares.

Bajaj Auto has gained 7.40 per cent in the past one month. The two- and three-wheeler maker's net profit increased around 23 per cent to Rs 1,491 crore for the quarter that ended December 2022 (Q3 FY23). The company's revenue from operations rose 3 per cent to Rs 9,315 crore.

Technical analysts largely felt the stock looked 'overbought', suggesting booking profit at current levels.

Osho Krishan, Senior Analyst- Technical and Derivative Research at Angel One, said, "Bajaj Auto has gained post the quarterly earnings and has seen a decent run from its major exponential moving averages on the daily chart. As far as levels are concerned, the bullish gap of Rs 3,740-3,830 is expected to act as a support zone for the counter in the near period. While on the higher end, the stock seems well possessed to re-test the recent swing high of Rs 4,100-odd levels in the comparable period."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The stock is slowly approaching towards its historical resistance of Rs 4,000-4100. One should book profits at the current levels. As of now, no fresh longs are advised."

AR Ramachandran from Tips2trades said, "The stock is currently in the overbought zone and hence investors should also book profits at current levels or keep a stop loss placed at Rs 3,740."

Resistance on the counter could be seen at Rs 3,962 and a close above this level may lead to a further rally up to the Rs 4,227 level in the near term, Ramachandran added.

The stock was last seen trading higher than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 64.89. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 19.67.

Bajaj Auto has an average target price of Rs 4,103.58, Trendlyne data showed, suggesting a potential upside of 6.83 per cent. The scrip has a one-year beta of 0.65, indicating low volatility.

Meanwhile, Indian equity benchmarks settled higher in highly volatile trade as gains in technology and consumer durables countered losses in energy and consumer goods stocks. The 30-share BSE Sensex pack rose 170 points or 0.29 per cent to close at 59,500; while the broader NSE Nifty index moved 45 points or 0.25 per cent up to finish at 17,648.

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