Political events overshadow robust earnings, Ashok Leyland dips 9.5 per cent

Indian stock markets posted fifth straight fall post Karnataka election outcome, followed by the Congress and JD(S) alliance and the resignation of BS Yeddyurappa from CM's post after BJP failed to form the government. Despite positive Q4 earnings report on Friday after market hours, Ashok Leyland, the commercial vehicle giant, drowned more than 9 per cent and closed 9.5 per cent down.

Ashok Leyland has dipped below its crucial supports at 143.30 followed by 138.25 levels. Ashok Leyland reported robust Q4FY18 earnings performance where it posted revenue and PAT growth of 22.8 and 48.4 per cent, respectively. The company also announced dividend of Rs. 2.43 per equity share of Re 1.

The stock of Ashok Leyland had given a Cup and Handle pattern breakout at 133 levels during February end and hit 155 levels in Mid-March. The stock consolidated at these levels and gave a breakout again in mid-April and hit the all-time high zone of 166.50-167.50. The stock gave a reversal Doji and thereby has plunged nearly 20 per cent till date.

Now the stock has just taken resistance turned support at 133.50 levels i.e. Monday’s low. The fall also witnessed volume spurt and oscillators falling below the oversold one. Going ahead, 130.75-129.50 would act as the next supports for the stock. On the contrary, if the stock bounces back from its current support, we hold 141.50 followed by 146.50 as the resistance levels.