Maruti is the gem after 2014 and it has given handsome profit for more than 12 quarters.
We have observed almost 17% price erosion over the past five months, however the stock never broke below the long term rising trend line. This indicates that the current fall was just a part of the overall continuation pattern and is healthy in nature. It has reinforced and created a new base from where the stock can take-off afresh.
Numerology – The Impact of 5
Maruti has a strong association with the number 5. Since April 2013, the stock has rallied significantly, hitting all time high of 9,996 on December 20, 2017. During this huge rally, the stock went through price corrections on three different occasions, which lasted for 5 months.In May 2013, after hitting a high of 1,777, the stock took a halt and corrected for 5-months before resuming a meaningful upswing.
After hitting all time high of 4,763 in September 2015, the stock again entered into a correction phase for 5-months before recommencing the north bound journey.
Coming to the current downfall, this too has lasted for 5-months and has finally shown sign of a fresh run away rally.
Flag breakout is ready
Our weekly chart analysis further indicates that the stock has broken out from a Flag pattern. The price outburst has been accompanied with consistent uptick in volumes. If the current breakout unfolds the way it should, then we expect Maruti Suzuki to surge higher towards its potential target of 11,095 over the next 9-12 months. The upward movement would stand void if the stock ends below the support of 8,557 on a weekly closing basis.
Short term view
Maruti has good returns with short term view where it can touch minimum of 11095 within 1 year, as per charts expect the same.
Long term view
Maruti has good returns with long term for minimum 5-10 years where the stock can reach even 30000 for 5 years and 50000 for next 10 years from now.
Disclaimer : We are not an SEBI registered Stock advisory firm, but we are in market Since 2007 and have large experience, Investors can check various options before investing in this stock. We do not recommend to buy, we are sharing our views.