The stock of Apollo Tyres gained 7.8 per cent accompanied by above average volume on Monday, breaking above a crucial resistance level of ₹100. This rally provides traders with a short-term perspective an opportunity to buy the stock at current levels.

Following sharp decline in early March, the stock recorded a 52-week low at ₹73.5 in late March. Thereafter, the stock reversed direction triggered by positive divergence on the daily RSI. Since late March, the stock has been in a medium-term uptrend. Last week, the stock decisively breached the 21- and 50-DMAs and currently continues to trend upwards, trades well above these averages. The stock appears to have resumed the medium-term uptrend with the recent rally.

Backing the uptrend, there has been an increase in daily volume over the past two months. The daily RSI has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Besides, the daily and the weekly price rate of change indicators feature in the positive terrain implying buying interest.

Short-term outlook is bullish for the stock. It can extend the uptrend and reach the price targets of ₹109 and ₹112 in the ensuing trading sessions. Traders can buy the stock with a stop-loss at ₹102.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

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