Dwarkesh Sugar: Will it break out to return a +30% gain?

Dwarkesh Sugar is currently trading in a tight range and most likely forming a pivot range of <= 7%

What is the trade idea?
Stock has risen 222% within 21 weeks and formed a good 2T VCP pattern. Now it's been consolidating for a good 17 weeks and with the low risk range that’s currently in progress, it is on my high alert now.

My expectation is that 78.50 should be crossed in the coming two weeks. (hopefully ;-) the markets have a tendency to surprise, always, and I'm wrong about 60% of the times)

I am expecting a possible consolidation within the marked tight range box for the next two weeks.

Here's my Trade Plan

  • Entry : On Breakout above at 80. 40
    Initial Stop Loss (ISL): Below @ 66.80 (SL based on structure)
    Note: Breakout needs to be supported with high volumes.

Potential Targets: 97.50, 105.90

Need to watch carefully what the price action will do around the resistance of 84 levels. If that is convincingly crossed, then both upper targets have a good probability of being achieved.

Since price has been consolidating for long, my expectation is that 84 ought to be crossed decisively. Keeping fingers crossed though.

Chart marked with the trade plan. Please feel free to clarify your doubts, and trade safe.
Comment: Markets overall looking weak ahead. Most likely the stock may continue to consolidate and even test the 200dma near 56-60 range.

Stock continues to be on my radar. The possibility of entry triggering soon is looking bleak, and patience could be needed for the next 4-6 weeks.
Trade closed: target reached: As on 14th Nov expectation was that 78.50 should be crossed in the coming two weeks. Soo thereafter the overall markets became weak and the above view was revised on 28th Nov indicating that 4-6 weeks of patience would be needed.

It took a total of 7 weeks instead of initial anticipated 2 weeks, which was in fact a very good thing to happen.

During these 7 weeks it traded in a narrow range, printing more green days than red and also showing good signs of accumulation. Of the total 35 sessions, 18 bars were green and 7 green bars had above average buying volumes. While red bars majorly were showing below average volumes. Excellent signs of institutional accumulation.

Also during these five weeks of consolidation two attempts at breakdown failed, and Dwarkesh eventually neared the rising 200day sma support zone.

With the second breakdown attempt failing above 200d sma, breakout above 74.50 was now needed for entry;

The Trade Plan was revised to
Entry : On Breakout above at 75.40
Initial Stop Loss (ISL): Below @ 64.80 (SL based on structure)
Note: Breakout above was needed with high volumes.

On 4th Jan 2022, the breakout occurred and entry was triggered in the opening hour itself. The trading volumes within the first hour of open supported the rise and eventually made the stock hit the upper circuit by the close of the day.

Thereafter Dwarkesh Sugar took just 9 sessions to return an impressive gain of +33%.

Patience pays.
Waiting it out for the right time for the low risk entry in the right direction and at the right location is the key to winning the momentum game.

Catching a momentum stock is much like waiting for the spring to be compressed fully. Then jumping on it just before the pressure is released, will help you fly higher with little effort.

Can you see that pattern?

What have you learned from these studies and updates, and how will you apply and gain from it?

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