HCL TECHNOLOGIES.... TO GO LONG OR SHORT?We can see the script getting rejected at the level of major resistance on multiple occasions.
The recent long green candle at this resistance level was considered a good breakout by most traders.
Points in favor of a pullback,
The breakout candle was followed by a bear candle of decent size. The follow-through from the breakout candle is not good, indicating huge selling pressure.
This is also confirmed by the higher volumes in the red candle than the breakout candle.
There is also a bullish divergence in the RSI pattern.
Points favor of a breakout,
The red candle is still above the line of major resistance.
The script after getting rejected from the resistance level a few days back didn't fall back to its support zone (around 900) but is trying to break the resistance again. Multiple hit at the resistance line is likely to weaken it eventually breaking the resistance soon.
So, now breakout or breakdown?
We should wait for one more day and the next candle will decide the course of action. A long green candle can suggest a long trade and a Doji or hammer or long red candle suggest selling and rejection in the script.
Happy trading!
