Banco Products Broke Out From a Consolidation, Continuing Its Massive Bull Run. Let's analyse in "Chart of the Week"
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes; it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
Price Action Analysis:
- Banco Products has completed a consolidation phase
- The stock has demonstrated exceptional momentum with a breakout above the ₹400 levels in April 2024
- Current trading price of ₹835.60 represents a gain of over 100% from the breakout point
- Price action shows strong institutional accumulation with increasing volumes during upward moves
Volume Spread Analysis
- Volume spikes are clearly visible during key breakout moments, particularly in Q2 2024
- The highest volume bars (green) coincide with price advances, indicating genuine buying interest
- Recent volume of 36.75M shares traded shows sustained institutional participation
- Volume patterns suggest smart money accumulation rather than retail speculation
Key Technical Levels:
Base Formation:
- Multi-year base formed between ₹100-400 levels from 2022 to early 2024
- This represents a classic cup and handle pattern on the weekly timeframe
- The base provided strong support and allowed for institutional accumulation
- Depth of base (approximately 18 months) suggests a strong foundation for future moves
Support Levels:
- Primary Support: ₹650-680 (previous resistance turned support)
- Secondary Support: ₹550-580 (50% retracement of recent rally)
- Major Support: ₹400-420 (breakout zone)
- Ultimate Support: ₹300 (top of multi-year base)
Resistance Levels:
- Immediate Resistance: ₹850-870 (current highs)
- Next Resistance: ₹950-1000 (psychological round number)
- Extended Resistance: ₹1200-1250 (measured move from base)
Position Sizing:
- Allocate a maximum of 3-5% of the portfolio to a single stock
- Use the pyramiding approach: 50% on initial entry, 25% on confirmation, 25% on extension
- Risk per trade should not exceed 2% of total capital
Risk Management Rules:
- Honour stop-losses strictly without emotional interference
- Book partial profits at predetermined levels
- Reduce position size if the stock shows signs of distribution
- Monitor sector rotation and overall market conditions
Sectoral and Fundamental Backdrop:
Auto Components Sector Overview:
- India's auto component industry is driving macroeconomic growth, with the market estimated to grow by USD 259.03 billion from 2025 to 2029 at a CAGR of 37%
- The auto components sector achieved 32.8% growth in FY24, with optimism for continued strong performance
- Export revenues could soar to $100 billion by 2030 from $21 billion in 2024, at a 30% CAGR
Fundamental Strengths of Banco Products:
- Market Cap of ₹11,952 crores with revenue of ₹3,379 crores and profit of ₹433 crores
- Leading manufacturer and exporter of automotive and industrial gaskets, heat shields, and sealing solutions since 1961
- Promoter holding at 67.88% shows strong management confidence
Growth Catalysts:
- Expanding electric vehicle segment creating new opportunities
- Sector attracted ₹2,45,771 crore FDI between April 2000 and December 2024
- Export potential with global OEM partnerships
- Various Indian auto component manufacturers are entering joint ventures with foreign companies for domestic production
Risks and Challenges:
- Commodity price fluctuations affecting margins
- Global economic slowdown impacting export demand
- Competition from Chinese manufacturers
- Trading at 9.17 times book value indicates a premium valuation
Market Outlook:
Short-term Outlook (1-3 months):
- Expect consolidation in the ₹750-870 range
- Watch any dip below ₹700
- Watch for a breakout above ₹870 for the next leg up
Medium-term Outlook (3-12 months):
- Sustained institutional interest expected
- Earnings growth should support price appreciation
Long-term Outlook (1-3 years):
- Export opportunities provide additional upside
- EV transition could create new revenue streams
- Sector leadership position makes it a preferred play in the auto components space
Full Coverage on my Newsletter this Week
Keep in the Watchlist and DOYR.
NO RECO. For Buy/Sell.
📌Thank you for exploring my idea! I hope you found it valuable.
🙏FOLLOW for more
👍BOOST if you found it useful.
✍️COMMENT below with your views.
Meanwhile, check out my other stock ideas on the right side until this trade is activated. I would love your feedback.
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes; it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes; it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
Price Action Analysis:
- Banco Products has completed a consolidation phase
- The stock has demonstrated exceptional momentum with a breakout above the ₹400 levels in April 2024
- Current trading price of ₹835.60 represents a gain of over 100% from the breakout point
- Price action shows strong institutional accumulation with increasing volumes during upward moves
Volume Spread Analysis
- Volume spikes are clearly visible during key breakout moments, particularly in Q2 2024
- The highest volume bars (green) coincide with price advances, indicating genuine buying interest
- Recent volume of 36.75M shares traded shows sustained institutional participation
- Volume patterns suggest smart money accumulation rather than retail speculation
Key Technical Levels:
Base Formation:
- Multi-year base formed between ₹100-400 levels from 2022 to early 2024
- This represents a classic cup and handle pattern on the weekly timeframe
- The base provided strong support and allowed for institutional accumulation
- Depth of base (approximately 18 months) suggests a strong foundation for future moves
Support Levels:
- Primary Support: ₹650-680 (previous resistance turned support)
- Secondary Support: ₹550-580 (50% retracement of recent rally)
- Major Support: ₹400-420 (breakout zone)
- Ultimate Support: ₹300 (top of multi-year base)
Resistance Levels:
- Immediate Resistance: ₹850-870 (current highs)
- Next Resistance: ₹950-1000 (psychological round number)
- Extended Resistance: ₹1200-1250 (measured move from base)
Position Sizing:
- Allocate a maximum of 3-5% of the portfolio to a single stock
- Use the pyramiding approach: 50% on initial entry, 25% on confirmation, 25% on extension
- Risk per trade should not exceed 2% of total capital
Risk Management Rules:
- Honour stop-losses strictly without emotional interference
- Book partial profits at predetermined levels
- Reduce position size if the stock shows signs of distribution
- Monitor sector rotation and overall market conditions
Sectoral and Fundamental Backdrop:
Auto Components Sector Overview:
- India's auto component industry is driving macroeconomic growth, with the market estimated to grow by USD 259.03 billion from 2025 to 2029 at a CAGR of 37%
- The auto components sector achieved 32.8% growth in FY24, with optimism for continued strong performance
- Export revenues could soar to $100 billion by 2030 from $21 billion in 2024, at a 30% CAGR
Fundamental Strengths of Banco Products:
- Market Cap of ₹11,952 crores with revenue of ₹3,379 crores and profit of ₹433 crores
- Leading manufacturer and exporter of automotive and industrial gaskets, heat shields, and sealing solutions since 1961
- Promoter holding at 67.88% shows strong management confidence
Growth Catalysts:
- Expanding electric vehicle segment creating new opportunities
- Sector attracted ₹2,45,771 crore FDI between April 2000 and December 2024
- Export potential with global OEM partnerships
- Various Indian auto component manufacturers are entering joint ventures with foreign companies for domestic production
Risks and Challenges:
- Commodity price fluctuations affecting margins
- Global economic slowdown impacting export demand
- Competition from Chinese manufacturers
- Trading at 9.17 times book value indicates a premium valuation
Market Outlook:
Short-term Outlook (1-3 months):
- Expect consolidation in the ₹750-870 range
- Watch any dip below ₹700
- Watch for a breakout above ₹870 for the next leg up
Medium-term Outlook (3-12 months):
- Sustained institutional interest expected
- Earnings growth should support price appreciation
Long-term Outlook (1-3 years):
- Export opportunities provide additional upside
- EV transition could create new revenue streams
- Sector leadership position makes it a preferred play in the auto components space
Full Coverage on my Newsletter this Week
Keep in the Watchlist and DOYR.
NO RECO. For Buy/Sell.
📌Thank you for exploring my idea! I hope you found it valuable.
🙏FOLLOW for more
👍BOOST if you found it useful.
✍️COMMENT below with your views.
Meanwhile, check out my other stock ideas on the right side until this trade is activated. I would love your feedback.
As per the Latest SEBI Mandate, this isn't a Trading/Investment RECOMMENDATION nor for Educational Purposes; it is just for Informational purposes only. The chart data used is 3 Months old, as Showing Live Chart Data is not allowed according to the New SEBI Mandate.
Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.