Hero’s stocks pile up as the Coronavirus outbreak halts economic activity

The Indian motorcycle and scooter manufacturer is the largest scoter manufacturer in the world, and also in India which has a market share of 46% in the two-wheeler category. The company’s unique models and user-friendly design of the two-wheeler makes it a competitive advantage for the company as it provides variety of collections in the two-wheeler segment. The business operations of the company has been stopped as the fear of the pandemic spread across the globe causing countries to lockdown as a part of preventive measures.

The following chart of Ichimoku cloud indicator shows the bullish trend for the stock as it increased by 2% during the previous trading session. Despite the declaration of the interim dividend, the stock prices were falling due to  increase in the fear of the pandemic cases across the countries which has totaled above 4 lakh cases. The outbreak has hit hard while the market sentiments for the stock has been strong which has been denoted by the bullish candlesticks over the past trading sessions.


The automobile sector has been facing a hardtime as the decision of lockdown has caused losses to its operations as the deadline for selling the BS4 two-wheelers would be sold or registered from April 1. But the company has requested permission from the SC to provide extension for winding up sales of the BS$ complaint vehicles by May 31. There are over 4-6 lakh BS4 two-wheelers which have been piled-up by the companies which would account for Rs.4600 crore which has been paused by the government through lockdown.

The following chart of Bollinger bands also shows the downfall of the stock since the spread of the Coronavirus as the stock fell by 32% from 1st February 2020. The Bollinger bands also shows an expansion in the width of the band as the volatility of the stock has increased over the period. Also the candlesticks formed are bullish which have already reached the lower band indicating a shift in the trend for the stock.

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