A lot of Auto Ancillary stocks have done amazing moves but fundamentally one can continue to believe they are cyclicals. At one point of time after a drop of 60-70% post 2008 a few had come down to terribly low valuations and almost on verge of bankruptcy.
But some have come of strong in the current bull market. Many of them are up 4-5 times from 2013-2014 levels.
I would not like to go into a debate as to how Auto Ancillaries have no pricing power etc but i believe all manufacturing business in India have started looking interesting and could surprise in coming years. Although have not been able to participate much apart from Munjal Showa which was a good trade, but i still think one needs to look at some of these names from a fresh perspective.
Similary have been very bullish on #Textiles as a sector for the last 1 year. Will write about in another post.
A couple of interesting charts.
SONA KOYO STEERING
- The stock gave a channel breakout at 56-58.
- Post that it consolidated around the previous all time highs of 63-65.
- TOday the stock has broken out with strong volumes.
- Start of a new trend it seems.
- Just an observation as to how one can trade smallcaps on technicals.
- Can you see the increase in volumes in July.
PRICOL
- Triangle breakout above 36-38.
- Good volumes seen in last 2 weeks.
- Today the stock has broken out with decent volumes.
#Disclosure - Sona Koyo Steering ( 56-58) and Pricol ( 38/30 ) have been recommended in Technical Traders Club and Big Value 2.0 . Please do your own research and we have our bias. Do read the disclaimer.
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Nooresh Merani
Securities covered above:: Sona Koyo Steering and Pricol
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