MFSL
Hello all!
This one's a bit complex. Please bear with me!! I'll try my best to explain.
MFSL has been trading inside a channel since March 2020(Covid Crash). Based on the stock's movement, a new trendline apart from the channel trendlines has emerged. We can see that the stock has been taking support from this supporting trendline since August 2020.
Right now we can see that the stock is again at its supporting trendline and also in its support zone thus generating a confluence. A new trendline can be drawn from the top of the channel which depicts how the stock has been falling.
This is where I see a long opportunity. As soon as the stock gives a strong close by breaking the trendline, we can go long. There are two ways in which you can set your stop loss(SL):
1)We can keep an SL below the support zone 1. This leads to an excellent Reward to Risk ratio.
2)We can go long with 50% of our total quantity. If stock breaks support zone 1 and reaches support zone 2, we can average out by buying our remaining 50% at this level and keep an SL below this zone. This again leads to a good Reward Risk ratio but not as good as in case 1.
With Nifty booming, I believe the chances for this trade to fail are quite less!
Would love to hear your thoughts on this!!
HAPPY TRADING!!
*NOT A CALL*