Honasa Consumer - Breakout Brewing After 6-Month Base Formation

24 Mei

HONASA : Breakout Brewing After 6-Month Base Formation - Is This the Perfect Entry Point?

After Q4 FY25 Results, Jefferies Adjusts Price Target to ₹400 From ₹320, Keeps at Buy. They target double-digit revenue growth on retail push, also eyeing Mamaearth revival, thus qualify for my Chart of the Week idea.

Base Formation & Pattern Recognition:

HONASA has carved out a compelling 6-month consolidation base between November 2024 and May 2025, with the stock oscillating between ₹197-280 range. This extended sideways movement represents a classic accumulation phase, where smart money has likely been building positions while retail investors remained on the sidelines.

The most recent price action shows a powerful breakout above the ₹280 resistance level, accompanied by explosive volume expansion - a textbook technical setup that often precedes sustained upward moves.

Key Technical Levels:

Key Support Levels:
- Primary Support: ₹280 (former resistance, now support)
- Secondary Support: ₹240-250 (mid-range consolidation zone)
- Major Support: ₹197 (base low and critical floor)

Key Resistance Levels:
- Immediate Resistance: ₹350-360 (psychological round number)
- Next Target: ₹400 (measured move from base breakout)
- Long-term Target: ₹472 (0.786 Fibonacci extension visible on chart)

Volume Analysis:

The standout feature is the dramatic volume surge accompanying today's breakout - nearly 5x the average weekly volume at 26.41M shares. This volume expansion validates the breakout and suggests institutional participation rather than retail-driven momentum.

The volume pattern during the 6-month base shows periodic spikes at key support levels, indicating accumulation by informed participants during weakness.

Technical Pattern:

The chart displays a Rectangle/Trading Range pattern that has resolved to the upside. The measured move target from this pattern projects to approximately ₹400, representing the height of the rectangle (₹280-₹197 = ₹83) added to the breakout point.

Trade Setup:

Setup Type: Breakout Play with Volume Confirmation

Entry Strategy:
- Aggressive Entry: ₹325-330 (current levels on any minor pullback)
- Conservative Entry: ₹285-290 (on retest of breakout level)

Position Sizing: Use 1-2% portfolio risk given the setup quality

Exit Strategy:
- Target 1: ₹360 (9-10% upside) - Book 30% position
- Target 2: ₹400 (20% + upside) - Book another 40% position
- Target 3: ₹450-470 (35-40% upside) - Ride remaining position

Stop Loss:
- Tight Stop: ₹310 (6% downside protection)
- Wider Stop: ₹275 (below breakout level for swing traders)

Risk Assessment:

Bullish Factors:
- Clean 6-month base formation
- Volume-confirmed breakout
- Multiple support levels established
- Strong sector tailwinds in the consumer space

Risk Factors:
- Broader market volatility could impact momentum
- Profit-booking likely near psychological levels
- Need to hold above ₹280 to maintain bullish structure

Bottom Line:

Honasa Consumer presents a high-probability technical setup with the stock breaking out of a well-defined 6-month accumulation base on strong volume. The risk-reward profile favours the bulls, with clearly defined support levels for stop placement and multiple upside targets for profit-taking.

The key now is whether the stock can sustain above the ₹280 breakout level and continue its march toward the ₹350-400 zone. Any pullback to the ₹285-290 area would offer an attractive secondary entry point for those who missed the initial breakout.

Keep in the Watchlist.
NO RECO. For Buy/Sell.

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Disclaimer: "I am not SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational and educational 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.

26 Mei

Dagangan aktif

Aggressive Entry: ₹325-330 (current levels on any minor pullback) Active.
Gave a Swing of -6.5% from RECO.

27 Mei

Nota

Down -3.18 % From RECO did good recovery