The auto sector remains favor of the season major auto companies are trading with a positive bias and their 52 week high can be seen in coming few months.
Post topping before major indices in the month of December 2015 and January 2016 there was significant correction in the sector weather it was two wheeler or four wheeler. From the month of February 2016 auto sector has started to recover with major indices and now outperforming them since April 2016.
After addition of Eichermotors in Nifty, weights of auto sector has increased in Nifty. If rainfall remains above normal then market may expect higher demand from auto sector in coming few quarters, till festival of Diwali 2016. Normally, it has observed over the period that auto rally will be followed by auto components. So one need to keep watch on major auto components manufactures which may give additional benefits.
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