Is Hero Motocorp a good buy now?
- KKS
- Jan 30
- 2 min read
Hero Motocorp has fallen more than 30% from its top. Hero Motocorp is a Nifty 50 company and investors look for good prices to buy the stock. However, we need to have strong reasons to buy the stocks when it is falling. I have done some analysis to see if the levels are making sense for buying the stocks.
Price near support: The stock has reached a former resistance that must have converted to support. The level of 4000, apart from being a round number, was earlier a resistance that was broken. Basis the polarity principle, there is a chance that this level could become a support and there is a chance for prices to bounce from here.
Prices near anchored VWAP: If we draw an anchored VWAP (red curve) from the low of major impulsive upswing that broke the resistance, we can see that the price is below this anchored VWAP. We know that anchored VWAP from important swing lows and retracements act as a support and prices can start a reversal move.
Price has reached Fibonacci reversal zone: Prices after creating a new high has retraced back to the fibonacci reversal zone of 50% and 61.8%. This zone can be a great buy for investors and hence there is chance of reversal.
Above mentioned pointers do show that Hero Motocorp is operating in an interesting zone that might be a good level for a long term buy. However, the prices are right now in a down trend and its difficult to predict the bottom unless we see the supporting price action. We need the prices to stop falling and show some sort of consolidation. We want the prices to overcome important short term moving averages like 9 EMA and 20 EMA. What we should do is to wait for prices to sustain above 4000 level and trade above the 9 EMA. Only then we can buy for a swing trade or as a long term buy. The prices have fallen very sharply from the top and hence the first target should be the all time high.
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