Today's Opening - 19904
Today's High - 20032
Today's Low - 19720
Today's Closing - 19949
I am writing on this stock for the first time ever.
Two out of my last three write ups have been automotive stocks and this is the third one.
After three days of negative closing, flattish closing today with low volumes. This is not a healthy sign for the stock.
The closing broadly has been below the 5-day Exponential Moving Average level since 21st Dec 2018. The Negative Directional Index too has been stronger than the Positive Directional Index since 21st Dec.
The 12, 26-day Moving Average Convergence Divergence has remained negative since 27th Dec 2018.
The 2-day Relative Strength Index too has remained above 30 since 1st Feb. The 20-day Commodity Channel Index has been below 100 since 11st Feb.
The 10-day Rate Of Change has been negative since 18th Feb.
Corporate Activity:
Eicher Motors operates in two segments - Royal Enfield (RE) and Volvo Eicher Commercial Vehicles (VECV). In Q3 FY '19, Royal Enfield had a 5.9% YoY drop in volume, while VECV had a 4.3% volume growth on a YoY basis.
In the commercial vehicle segment, the lag impact of the new axle load norms is still hurting the company.
More than 70% of Royal Enfield's sales come from the 350 cc models, dominated by the Classic range. Bigger capacity bikes have failed to register healthy numbers for RE, even forcing the company to phase out a product (Continental GT).
For Royal Enfield, the Kerala market is yet to make a comeback post floods, with a loss of few thousand units per month.
The company had launched two new motorcycles in Nov '18 - the Interceptor 650 Roadster and the Continental GT 650. The production of the 650 cc Twins is expected to go up to 4.5k-5k per month only by Apr-May '19 from 2k per month in Jan '19. The impact is that the waiting period is currently almost six months.
Royal Enfield has been bogged down by two rounds of worker strikes over the past four months. The first strike impacted a production loss of 30k units, while the latest one caused a loss of 3k units.
Stock Outlook:
Having lost more than 15% over the past three months, Eicher Motors looks extremely weak and can go down to 18800 levels soon. Only if the stock breaks the resistance of 21900-22000, we can be sure that the stock has come out of the long bear grip. Keep accumulating on dips from a long term perspective.
Today's High - 20032
Today's Low - 19720
Today's Closing - 19949
I am writing on this stock for the first time ever.
Two out of my last three write ups have been automotive stocks and this is the third one.
After three days of negative closing, flattish closing today with low volumes. This is not a healthy sign for the stock.
The closing broadly has been below the 5-day Exponential Moving Average level since 21st Dec 2018. The Negative Directional Index too has been stronger than the Positive Directional Index since 21st Dec.
The 12, 26-day Moving Average Convergence Divergence has remained negative since 27th Dec 2018.
The 2-day Relative Strength Index too has remained above 30 since 1st Feb. The 20-day Commodity Channel Index has been below 100 since 11st Feb.
The 10-day Rate Of Change has been negative since 18th Feb.
Corporate Activity:
Eicher Motors operates in two segments - Royal Enfield (RE) and Volvo Eicher Commercial Vehicles (VECV). In Q3 FY '19, Royal Enfield had a 5.9% YoY drop in volume, while VECV had a 4.3% volume growth on a YoY basis.
In the commercial vehicle segment, the lag impact of the new axle load norms is still hurting the company.
More than 70% of Royal Enfield's sales come from the 350 cc models, dominated by the Classic range. Bigger capacity bikes have failed to register healthy numbers for RE, even forcing the company to phase out a product (Continental GT).
For Royal Enfield, the Kerala market is yet to make a comeback post floods, with a loss of few thousand units per month.
The company had launched two new motorcycles in Nov '18 - the Interceptor 650 Roadster and the Continental GT 650. The production of the 650 cc Twins is expected to go up to 4.5k-5k per month only by Apr-May '19 from 2k per month in Jan '19. The impact is that the waiting period is currently almost six months.
Royal Enfield has been bogged down by two rounds of worker strikes over the past four months. The first strike impacted a production loss of 30k units, while the latest one caused a loss of 3k units.
Stock Outlook:
Having lost more than 15% over the past three months, Eicher Motors looks extremely weak and can go down to 18800 levels soon. Only if the stock breaks the resistance of 21900-22000, we can be sure that the stock has come out of the long bear grip. Keep accumulating on dips from a long term perspective.
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