Many stocks have broken out of their bottoms and more are on the verge of breaking out of their bottoms and going into a major uptrend. With more and more stocks going into a major uptrend, there is a good probability that he indices too, will go into a major uptrend.

However, stocks in the new economy continue to lag behind and even if they go into an intermediate uptrend, they are not in a position to cross their earlier intermediate tops and investors must stay away from them for some more time. But, there are better opportunities in the old economy for investors and traders .

Investors must continue to concentrate in these stocks. In the four-wheeler automobile sector, we saw in the last few weeks that a few stocks have bottomed out and broken out of their bases and are in a major uptrend and a few more are likely to follow suit. This is a bullish sign, which suggests that the sector may have bottomed out, giving opportunities for investors to get into the sector at the right time. A look at the individual stocks will give us more insights about the sector and the stocks.

Ashok Leyland
Ashok Leyland has gone into a major uptrend as the stock has exhibited ascending intermediate tops. The stock is taking a support at its 30 WMA and investors must hold on to the long positions with a stop at 42. The relative strength line for the stock is below its trigger line but has been moving towards the trigger line and higher values will result in the relative strength line crossing the trigger line. Hold on to the stocks and any fresh breakout must be used by investors to get into it. Traders must trade the stock on the long side. There has been a spurt in the trading volume in the past few weeks which is a bullish sign as it means that the rise in the stock has been supported by a rise in the volume.

Eicher Motors
Eicher Motors has gone into a major uptrend as the stock has exhibited ascending intermediate tops and bottoms. The stock has moved above its 30 WMA and the relative trend line has moved above its trigger line. However, the trading volume has not improved and this is a bearish sign. Hence, investor must refrain from taking any long positions and unless there is a good improvement in the trading volumes, they must not venture into this stock even though it is in a major uptrend.

Telco
Telco completed an "Inverted Head and Shoulder" formation and broke out of the neckline with a spurt in volume. This is a very bullish sign indicating that the stock has bottomed out and higher levels will be soon seen.

The major trend of the stock has turned up and it has been trading above its 30 WMA. The relative strength line has moved above its trigger line indicating that the stock has been outperforming the indices. Investors must hold on to the stock and any pull back in towards the neckline in the coming week must be used to get into it with a stop just below the neckline. The breakout of the inverted head and shoulder formation will give the stock a minimum target of 25 points on the higher side. Volume has been supporting higher levels and investors must get into the stock immediately.

Escorts
Escorts was the first stock in the automobile sector to have gone into a major uptrend. The stock took a support at the 30 WMA in December and registered higher levels. Trading volumes have been exhibiting a spurt suggesting that the rise in the stock has been supported by the rise in the volume.

The relative strength line is well above the trigger line suggesting that the stock is outperforming the indices for quite some time now. Investors must hold on to the stock and must add long positions in the next intermediate downtrend. Traders must trade this stock on the long side only.

Mahindra & Mahindra
Mahindra & Mahindra is still in an intermediate downtrend as the stock has been staying below its falling 30 WMA and has not yet crossed its earlier intermediate top. However, the weekly momentum indicators have been exhibiting signs of bottoming out and this suggest that the stock may bottom out soon. The trading volume in the past two months has seen a dramatic rise suggesting that there was large scale buying at lower levels. But, investors must watch the stock crossing its earlier intermediate top with a rise in volume and the weekly indicators are suggesting that it could happen in the next intermediate rise. Thus, investors must keep a close watch at the stock and can get into it in the next intermediate rise.

Punjab Tractors
Punjab Tractors is staying below its falling 30 WMA and continues to exhibit descending intermediate tops and bottoms and hence, the major trend of the stock is down. The relative strength line for the stock has been staying below its trigger line though it has been moving closer to it. Investors must wait for the stock to bottom out before getting into it. A higher intermediate bottom will be the first sign of the major change in the trend and this will be the signal to get into the stock.