SIPC: Golden Ratio Confluence with Potential Bullish Divergence
EGX:SIPC
Ticker: EGX: SIPC (Sabaa International)
Timeframe: Daily (1D)
The market has seen a sharp correction following a strong move up to EGP 4.90. The current price action suggests that SIPC is now sitting on a critical support area, presenting a high-probability opportunity for a reversal.
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The Confluence Analysis
1. Fibonacci Golden Ratio Support
The recent decline has perfectly retraced into the **"Golden Pocket"** defined by the **61.8% and 65%** Fibonacci retracement levels.
Swing Measured: From the low of EGP 1.080 to the high of EGP 4.900.
Golden Ratio (61.8%) Level: EGP 2.790
65% Level (Approx):EGP 2.579
This zone (EGP 2.790 to EGP 2.579) is historically significant for strong reversals and acts as a powerful area of support for the previous uptrend.
2. Potential Bullish RSI Divergence
While the price has moved lower and tested new lows in this correction zone, the **Relative Strength Index (RSI)** is showing signs of internal strength building up.
Observation: The price candles have made a **lower low** relative to the last major dip (around late October), but the RSI has made a **higher low**, maintaining strength around the 37.43 mark.
Signal: This **Bullish Divergence** indicates that the **selling momentum is weakening** and a counter-trend move (an upward reversal) is likely to initiate from this support zone.
### 🛠️ **The Actionable Trading Plan (LONG Setup)**
Given the confluence of the Golden Ratio support and the Bullish Divergence, a Long position is favored here.
* **Trade Direction:** **LONG (Buy)**
* **Entry Zone:** Enter within the Golden Pocket: **EGP 2.80 - EGP 2.65** (Waiting for a clear daily candle close confirmation or bullish reversal pattern within this zone is advisable).
* **Stop Loss (Risk):** Place the Stop Loss **below the 78.6% Fib level** to protect against a trend breakdown.
* **SL Price:** **EGP 2.35** (Below the 78.6% level of EGP 1.987).
* **Take Profit Targets (Reward):**
* **TP 1:** EGP 3.441 (38.2% Retracement) - *Taking initial profit.*
* **TP 2:** EGP 3.759 (Previous support/resistance zone)
* **TP 3:** EGP 4.626 (Near Previous Swing High)
**Risk/Reward:** The initial trade setup offers a favorable **R:R of approximately 1:2.5** to the first major target (TP1) and much higher to TP3, adhering to sound risk management principles.
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### ⚠️ **Disclaimer & Risk Management**
This analysis is for educational and illustrative purposes only and does not constitute financial advice. Always perform your own due diligence and never risk more than 1-2% of your account capital on any single trade. Use a stop-loss order to manage your risk.
