Stock has given a breakdown from 24 rs levels. But clearly lacks follow through. This shows stock is being accumulated by market makers by narrow price range and high volumes. The narrow range formed is just below the breakdown, usually retailers exit on breakdown and market makers take advantage of to accumulate the stock. Stock is trading around 15 16 % form the breakdown level, insignificant down move after such structural breakdown of around 1 year consolidation.
On Daily charts
Increase in volumes after breakdown, shows stock moving in strong hands. Why anyone would buy aggressively after breakdown as evident by high volume after such breakdown? Retailers would have exited on breakdown candle with highest volume. Usually known as blow off candle. This blow off candle here is clearly telling there is panic selling here.
How to trade or accumulate such stocks?
make 5 to 6 parts of total allocation invest 1 or 2 parts at current levels. On every dip closer to 17-18 rs area keep buying. Below 17-18 exit full position. Make sure you park such amount that you are ready to loose and overall allocation should not exceed 5 to 10% of account size. This might change from person to person.
Please note these are reversal trades with lower success rate but give multibagger returns.
Kindly analyse and then take positions. These are risky trades.
Would it be safer to enter after stock breaks 23-26 band? What should be volumes at this breakout? High or Low volumes?