The above analysis is done purely based on price action and chart patterns.
The analysis is done on daily TF hence price may take few days to few weeks in order to reach the targets. Traders can take advantage of this analysis in intraday trades as well.
In technical analysis, we say that a level/zone which first acts as a resistance for price, becomes support if the price breaks that level/zone.
Also, a breakout is considered as good, if it is confirmed by increased volume.
If the price corrects thereafter with smaller volume candles, it only means that the big hands that have entered or went long in the stock has not exited and this is just a small retest or retracement part.
Keeping in mind the above learning, if we observe the chart, we can see that after falling for more than 2 years from its ATH levels, price took support at a zone which had acted as resistance for the price when price was trying to start its upward rally in 2011.
Thereafter the price has been making higher highs and higher lows continuously - sign of an uptrend.
The price was trading in an ascending channel pattern for last 9-10 months before giving a huge breakout from it on 03rd Feb. The breakout was confirmed by huge volume candle. It was a breakout from the trendline as well (a trendline formed by connecting three swing highs of past and then simply extending it further - as shown in image itself).
Thereafter profit booking started in the stock and price started falling. But we can clearly see that price is trying to take support at that crucial zone. And the volume candle is also smaller.
Hence, this can be just a retest before resuming its upward rally.
Now on Monday, one can either wait for price to touch its support level (upper limit of channel or trendline) and then take entry. Or one can start accumulation between 248-258 range.
SL can be placed either near 230 or for safe traders, they can put SL below the low of breakout candle, which is 213.
First Target will be the next swing high (zone marked with green rectangle). Traders can thereafter trail their SL to ride the rally or book their profits and exit completely.
Pls note that the above analysis is purely for educational purpose. Traders must do their own study before entering into any trade. Traders must trade as per their own risk taking capacity and money management
Feel Free to comment for any queries regarding the above stock or price action analysis in general.
Also check out my other ideas to understand how price action works and how it can be used to make regular profits without any complex strategies.
The analysis is done on daily TF hence price may take few days to few weeks in order to reach the targets. Traders can take advantage of this analysis in intraday trades as well.
In technical analysis, we say that a level/zone which first acts as a resistance for price, becomes support if the price breaks that level/zone.
Also, a breakout is considered as good, if it is confirmed by increased volume.
If the price corrects thereafter with smaller volume candles, it only means that the big hands that have entered or went long in the stock has not exited and this is just a small retest or retracement part.
Keeping in mind the above learning, if we observe the chart, we can see that after falling for more than 2 years from its ATH levels, price took support at a zone which had acted as resistance for the price when price was trying to start its upward rally in 2011.
Thereafter the price has been making higher highs and higher lows continuously - sign of an uptrend.
The price was trading in an ascending channel pattern for last 9-10 months before giving a huge breakout from it on 03rd Feb. The breakout was confirmed by huge volume candle. It was a breakout from the trendline as well (a trendline formed by connecting three swing highs of past and then simply extending it further - as shown in image itself).
Thereafter profit booking started in the stock and price started falling. But we can clearly see that price is trying to take support at that crucial zone. And the volume candle is also smaller.
Hence, this can be just a retest before resuming its upward rally.
Now on Monday, one can either wait for price to touch its support level (upper limit of channel or trendline) and then take entry. Or one can start accumulation between 248-258 range.
SL can be placed either near 230 or for safe traders, they can put SL below the low of breakout candle, which is 213.
First Target will be the next swing high (zone marked with green rectangle). Traders can thereafter trail their SL to ride the rally or book their profits and exit completely.
Pls note that the above analysis is purely for educational purpose. Traders must do their own study before entering into any trade. Traders must trade as per their own risk taking capacity and money management
Feel Free to comment for any queries regarding the above stock or price action analysis in general.
Also check out my other ideas to understand how price action works and how it can be used to make regular profits without any complex strategies.