Not a good time to buy auto stocks: Rajat Bose

Rajat Bose, rajatkbose.com, talks to ET Now on Auto stocks.

While the general feeling is that interest rates have not peaked out as yet a number of people say that it may make sense to start buying into auto stocks now but what do your chart suggests?

I would say there are, if you look at two stocks, Mahindra & Mahindra and Hero Honda one from the two wheeler space and one from the four wheeler and commercial vehicle space.

These two stocks had been showing considerable strength but if you look at stocks like Maruti or Tata Motors I would not say that they represent the same case.

Even Bajaj Auto, for that matter, will showing some bit of strength so on declines one can consider buying into either Bajaj Auto or Hero Honda because they were showing much better relative strength compared to the market.

But if you are buying four wheeler stocks I would say in my experience of last two decades you have to watch two stocks: one is Larsen & Toubro and the other one is Tata Motors, when they give clear reversal signals that means that the market is actually in for a much better reversal swing.

In fact the bull market beginning has always been signalled in the past couple of decades by these two stocks and although Larsen as I said earlier was looking a bit better. Tata Motors I cannot say the same thing so I would be a little wary of buying into auto stocks right now.