Technical View Based on Demand and Supply ZonesNSE: BAJAJ_AUTO | Date: May 22, 2025
This post offers an educational perspective on the price behavior of Bajaj Auto based on historical demand and supply zones. It is intended solely for learning purposes and does not constitute investment advice. All observations are technical in nature and should be used for understanding market structure and price action.
Bullish Setup:
A potential bullish scenario may unfold when the price enters or touches a well-identified demand zone. Traders learning price action strategies often look for bullish candlestick formations such as a hammer, bullish engulfing, or a strong green candle as signs of potential reversal. Additional confirmation can be derived from volume spikes or a follow-through candle, which may indicate the presence of institutional interest or increased activity. Indicators like RSI bouncing from lower levels or an EMA crossover may also support the view, although they are optional tools to enhance confidence in the zone. On the Bajaj Auto chart, two demand zones are worth observing for learning purposes: the 8542–8515.50 zone and the 8495–8470 zone. Price has previously responded positively to these areas, suggesting they may act as key support zones. If the price approaches these levels again, one may study how price behaves and whether it forms bullish confirmation signals. The potential upside reference levels, based on previous market structure, lie at the 8720–8765 zone, which has been tested earlier, and a fresh supply zone between 8815–8836.50. These may act as possible resistance levels in the future based on historical supply.
Bearish Setup:
On the flip side, a bearish scenario may become evident if the price moves into a previously identified supply zone. Learners should observe for bearish candlestick patterns like a shooting star or a bearish engulfing pattern. These patterns, particularly when accompanied by volume spikes, can indicate that sellers are entering the market with strength. If RSI reaches overbought levels or shows signs of divergence, this may add weight to a potential reversal view. Bajaj Auto’s chart shows two important supply zones to monitor: 8720–8765 (a retested zone) and 8815–8836.50 (a fresh supply area). Price could potentially react from these levels, and watching the candle formations here can provide valuable insight into short-term sentiment. In such scenarios, the nearest demand zone — for example, the 8542–8515.50 area — may serve as a possible reference point for downside movement.
Risk Strategy:
Proper risk management plays a vital role in navigating market uncertainties. For educational reference, it is advisable to position a stop loss just beyond the demand or supply zone—typically by 5 to 10 points, depending on prevailing volatility. Following a minimum 1:2 risk-to-reward ratio not only supports disciplined trading but also helps in maintaining long-term capital efficiency and consistency.
Final Thought – Zone Plus Confirmation
A good learning takeaway is: “Zone + Confirmation Candle = Higher Probability Setup.” Observing how price behaves at key zones, supported by clear candlestick patterns and volume behavior, often provides valuable lessons in price action trading. Always approach such analysis with discipline and patience, and ensure that all trading decisions are backed by sound risk management.
⚠️ Risk Management: Always trade with a clearly defined stop loss. Avoid entering positions impulsively. It is advisable to start with a smaller quantity and increase your exposure only if the price action confirms the continuation of the trend. Capital protection should always be the priority.
📢 Disclaimer:
This content is created purely for educational and informational purposes. It is not intended as investment advice, stock recommendations, or trading tips. Trading and investing in the stock market involves risk. Please consult with a SEBI-registered financial advisor before making any investment decisions. The author/creator is not registered with SEBI and shall not be held responsible for any losses incurred based on this information. Always do your own research and use proper risk management.
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