Technical Momentum Gains Traction
Rico Auto Industries Ltd (Stock ID: 905788), a prominent player in the Auto Components & Equipments sector, has demonstrated a significant technical trend upgrade as of late November 2025. The company’s Mojo Score has risen to 77.0, accompanied by an upgrade in Mojo Grade from Hold to Buy on 10 Nov 2025, reflecting improved market sentiment and technical strength. The stock’s market capitalisation grade stands at 4, indicating a mid-cap status with solid growth prospects.
On 23 Jan 2026, the stock closed at ₹122.95, marking a robust day change of 6.27% from the previous close of ₹115.70. The intraday range was between ₹117.55 and ₹125.00, showing strong buying interest near the upper band. The 52-week high and low are ₹142.30 and ₹49.50 respectively, highlighting the stock’s considerable appreciation over the past year.
MACD and Moving Averages Signal Strength
The Moving Average Convergence Divergence (MACD) indicator is a key momentum oscillator used to identify trend direction and strength. For Rico Auto Industries, the weekly and monthly MACD readings are both bullish, signalling sustained upward momentum. This is complemented by daily moving averages that also reflect a bullish stance, indicating that short-term price action aligns with longer-term trends.
The convergence of these indicators suggests that the stock is likely to maintain its upward trajectory, supported by increasing buying pressure and positive investor sentiment. The bullish MACD crossover on weekly and monthly charts confirms that momentum is building, which could attract further technical buying.
Bollinger Bands and RSI Provide Additional Insight
Bollinger Bands, which measure volatility and potential price breakouts, show a weekly bullish signal and a mildly bullish stance on the monthly timeframe. This indicates that the stock price is trading near the upper band on a weekly basis, often a sign of strength and potential continuation of the rally. The mildly bullish monthly reading suggests that while momentum is positive, some caution is warranted over the longer term.
Relative Strength Index (RSI) readings on both weekly and monthly charts currently show no clear signal, hovering in neutral zones. This neutrality implies that the stock is neither overbought nor oversold, providing room for further price appreciation without immediate risk of a sharp correction.
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Additional Technical Indicators: KST, Dow Theory, and OBV
The Know Sure Thing (KST) indicator, which aggregates multiple rate-of-change measures, is bullish on both weekly and monthly timeframes for Rico Auto Industries. This reinforces the positive momentum narrative and suggests that the stock’s price action is supported by underlying strength.
However, the Dow Theory presents a mixed picture: mildly bearish on the weekly chart but mildly bullish on the monthly chart. This divergence indicates some short-term caution among traders, while the longer-term trend remains constructive.
On-Balance Volume (OBV), a volume-based indicator that helps confirm price trends, is mildly bearish on the weekly scale but bullish monthly. This suggests that while recent volume patterns may show some distribution, the overall accumulation trend remains intact, supporting the bullish outlook.
Comparative Returns Highlight Long-Term Outperformance
When analysing returns relative to the benchmark Sensex, Rico Auto Industries has delivered impressive long-term gains. Over the past year, the stock has returned 39.87%, significantly outperforming the Sensex’s 7.73% return. Over five years, the stock’s return of 239.64% dwarfs the Sensex’s 68.39%, underscoring the company’s strong growth trajectory and resilience.
Shorter-term returns have been more volatile, with the stock posting negative returns of -3.76% over one week and -3.98% over one month, slightly underperforming the Sensex’s -1.29% and -3.81% respectively. Year-to-date, the stock is down 9.76% compared to the Sensex’s 3.42% decline, reflecting recent market pressures. Nonetheless, the technical upgrades suggest a potential reversal in momentum.
Valuation and Market Positioning
Rico Auto Industries operates in the Auto Components & Equipments sector, which is currently benefiting from increased demand driven by automotive production recovery and supply chain stabilisation. The company’s mid-cap status, combined with a strong Mojo Grade upgrade to Buy, positions it favourably among peers.
Investors should note the stock’s proximity to its 52-week high of ₹142.30, indicating room for upside but also necessitating monitoring for potential resistance levels. The current price of ₹122.95 suggests a valuation that balances growth potential with risk.
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Outlook and Investor Considerations
The technical parameter changes for Rico Auto Industries Ltd point to a strengthening bullish momentum, supported by multiple indicators across different timeframes. The upgrade in Mojo Grade to Buy and a strong Mojo Score of 77.0 reflect improved confidence in the stock’s near-term prospects.
While short-term volatility remains a factor, particularly given the mildly bearish weekly Dow Theory and OBV signals, the overall trend suggests that the stock is poised for further gains. Investors should monitor key technical levels, including the 52-week high and moving average supports, to gauge momentum sustainability.
Given the company’s solid long-term returns relative to the Sensex and the positive technical backdrop, Rico Auto Industries Ltd remains an attractive candidate for investors seeking exposure to the auto components sector with a growth orientation.
Summary
In summary, Rico Auto Industries Ltd has transitioned from a mildly bullish to a bullish technical stance, supported by strong MACD signals, bullish moving averages, and positive KST readings. Despite some short-term caution from Dow Theory and OBV, the stock’s long-term performance and recent technical upgrades provide a compelling case for investors to consider adding or holding the stock within their portfolios.
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