Bajaj Auto! Breathing Tough

Bajaj Auto results was the first trigger for the stock to see its price correcting. The stock crossed the 61.8% and 50% quite easily. The stock is now looking for some information to start the next phase. However, the following are some of the key issues to be noted.

• Volumes on this chart has been growing over the past few days and the frontline auto stocks are seeing some erosion in their prices.
• Accumulation Distribution chart is at a level where there is a high probability of the stock reaching new lows.
  
• MACD charts are giving comfortable signals than the others. The column bars on the chart are decreasing. However, even here the bullish line has just seen a small expansion just when it was closing.
• RSI is the feel good factor showing some signals that further downside could be limited in the stock

An upside for buying this stock could come if the price crosses Rs. 2910 convincingly and a downside for the stock would be Rs. 2630 as the first level and Rs. 2590 coming from the fibonacci charts as the second level. Given the higher downside on the stock than the upside, I would wait for some more time!