Hero MotoCorp bounces from trendline support

The stock of Hero MotoCorp Limited has bounced back from the edge of the rising trendline support that is formed by connecting the swing lows from April 2020 and coincides with 20-day EMA level. The reversal from the support is further justified with strong volumes. Additionally, the stock has formed a sizeable bullish candle, suggesting that the bulls are taking control near the medium-term support.

The major trend of the stock is bullish, as it is trading above its weekly pivot and above its long and short-term moving averages, that is, 20-day, 50-day, 100-day and 200-day EMAs. The positive crossover on 14-period daily RSI supports the overall bullish price structure.

Moreover, the average directional index (ADX), which shows trend strength, is as high as 32.37 on a daily chart and 31.47 on a weekly chart. Generally, level above 25 is considered as a strong trend. In both the timeframes, the stock is meeting the criteria.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Friday’s low of Rs 2,230.70 level. On the higher side, the level of Rs 2,440, followed by Rs 2,670, would be seen as the next resistance zone for the stock.

On Friday, the stock of Hero Motocorp closed at Rs 2,401.85 per share, surged by 3.98 per cent from its previous close. The stock opened at Rs 2,242 per share and hit an intraday high of Rs 2,415 and a low of Rs 2,230.70 per share on NSE.