Amtek Auto bouncs back

Amtek Auto, after having bled constantly for two-three days, is back on the top gainers list today, that too when rest of the market is crashing. It breached the upper circuit today at Rs.70.10 and it is up over 5.5% with volumes surging to over 28 lakh shares.

Explaining this sharp bounce back succinctly by our Editor, Mr.SP Tulsian, “Amtek Auto having corrected and now ruling at Rs. 63, seen to have bottomed out, as seen from the delivery and Futures data of yesterday, with delivery volume of close to 1 crore shares seen on NSE, while Future OI fell by just about 10 lakh shares only. This indicates that arbitrage or margin shorts in Futures were bought by new set of traders, while selling of delivery by lenders, also got absorbed by prudent investors, at an average rate of Rs. 64 – Rs. 65. This has largely taken out poison from the stock, of margin funding and its pressure, which can now make the stock to move to Rs. 74 – Rs. 75 in this series.” He now expects the stock to soon hit the three-digit mark in the September series as well. His opinion is that though the company has huge debt, it has good auto ancillary business infrastructure globally as well. He advises one to buy as an investor or as a positional trader.