Data Patterns – Absorption Phase Near Trendline ResistanceData Patterns (India) Ltd – Absorption Phase Near Trendline Resistance
NSE:DATAPATTNS
📈 Pattern & Setup:
Data Patterns is floating right below a crucial descending trendline resistance, showing classic signs of absorption after two consecutive shakeouts. Each shakeout was followed by a recovery with narrowing volatility, suggesting strong hands quietly building positions beneath the surface.
The stock has also formed a “Bull Snort” setup — a rare occurrence where the price absorbs supply near resistance instead of rejecting it. This indicates institutional accumulation and prepares the ground for a clean breakout move.
A close above 2,850–2,860 with strong volume could confirm the breakout, unlocking a potential move toward 3,800+.
📝 Trade Plan:
✍Entry: Above 2,860 (breakout confirmation)
🚩Stop-Loss: 2,700 (below the absorption low)
🎯Targets:
Target 1 → 3,250
Target 2 → 3,800 (38% potential move)
💡 Pyramiding Strategy:
1. Enter 60% above 2,860 on breakout confirmation
2. Add remaining 40% above 2,900 with volume follow-through
3. Trail stop-loss to 2,780 once price crosses 3,100
🧠 Logic Behind Selecting this Trade:
The combination of back-to-back shakeouts, higher lows, and visible absorption reflects smart money activity. The stock’s ability to hold near resistance instead of falling back confirms strength. This kind of coiling price action just below a trendline often leads to a powerful breakout rally once supply is fully absorbed.
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🔴Disclaimer:
This analysis is for educational purposes only. Not a buy/sell recommendation. Please do your own research or consult your financial advisor before trading.
