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Breakdownfailure

Sterlite Tech- Is it Going for Another Top..In technical analysis, we examine historical data of an instrument to anticipate its future course of action. We all would agree that Price and volume are the primary and perhaps the purest form of data in technical analysis and that’s why some traders, including me, are always more inclined towards them. In this idea, I would like to share some of my observations on Sterlite Tech. which just caught my attention due to the following reasons. 2018 TOP On the left side of the chart, we had a strong uptrend followed by a top formation. Calling it a double top won’t be a misnomer. Almost a yearlong formation and then a sharp breakdown. 2021 TOP The stock bottoms out in 2020 with an Inverted Head and Shoulders pattern and reverses up back into 2018 top. The stock spends almost 6months in this zone (300) and forms another top here in 2021. BREAKDOWN FAILURE On the right-hand side, we can see a huge consolidation (into the inverted H&S of 2020) from July2022 to Feb2024 and then a breakdown of support (128). But this breakdown could not hold, and the stock is now back above 128, indicating a breakdown failure. ANOTHER TOP Generally, we see a sharp rally after a breakdown failure. If that happens, the stock may rally for 2021 top (260 or so). As per timeline, the previous tops were formed in 2018 and 2021. We may expect another one with a 3years gap, that is by the end of 2024. However, we should never lower our guard and approach cautiously if the stock fails to sustain above 125 again. That would require another take on the stock. I hope you found this analysis useful. Do press 🚀 and comment for more such analysis in future.
NSE:STLTECHLong
by Bravetotrade
2
Gold: Analysis✔Gold was holding 50200 since mid of May. It held this level at three occasions (see chart) but finally broke it in the mid of September. ✔So, a lot of traders who bought at 50200 support, with stop loss underneath this level, were shaken out in this breakdown. Most would have reversed their positions to short. Gold revisited 50200 in a retest attempt and this normally attracts pullback traders to go short. So many short positions are supposedly added till the end of September, with stop loss just above 50200. ✔But as Gold managed to sustain above 50200 again, most stop loss orders got triggered leading to short covering. Everyone who was shorting below this level, had to buy in order to close their positions. Also fresh buyers would look to catch this opportunity. This huge flux of buy orders lead to a sharp rally. ✔Presently it is near 52000 round number which has acted as an important level in the past too. Also there is trendline resistance, joining April and August highs at around 52100. ✔So two things can happen around above resistance levels. Either buyers would absorb supply at resistance and push Gold to next resistance 52750-52800 in the short term or profit taking/sellers would push it back to 51000 or 50200. Only further price action would throw more light upon this. Thanks for reading. Do not forget to like for more such ideas in future.
MCX:GOLD1!
by Bravetotrade
3
The Breakout Failure: Trade The Sulking EdgesHi Here I come with another educational post. This time I will try to explain the breakout failure pattern along with the psychology and manipulation behind them. For the sake of simplicity, I am taking examples of historical support and resistance levels. I will only explain the breakout failure pattern assuming that the breakdown pattern will be read upside down by the readers themselves. Ok..let's begin. THE BREAKOUT FAILURE I hope everybody understands what is a historical support. Simply put, its a point where the price has taken support and bounced multiple times. Now that we have a support level, some bigwig buyers will be interested in buying at that level. Generally these are FIIs and DIIs who want to put millions of Rupees into that stock at that particular level. But the problem for them is that, they do not have enough supply/sellers at that support level to meet their requisite demand. Why? because its a support level and nobody is interested in selling at support..right? Now that's how they cope with this problem...the manipulation. The Institutions have resources to manipulate :) hope you understand coz I dun wanna delve much into that in this article. In simple words I would just say that they have the power to push the price beyond certain levels. Ok now that we know the basic stuff let's get on to the chart. In the chart (Fig.I), the price bounced from the support multiple times thus forming a historical support. At point A, retail buyers were convinced that the support is valid. They also saw a bullish candlestick pattern and executed their buying orders with stoploss just below the support level. This scenario fetches a lot of supply (sell orders/stoplosses) below the support level. The price proceeded up for a while (due to desparate retail buyers) before the manipulator steps in. Now the manipulators only job is to push the price down so that retail stoplosses get hit (point B). As soon as the support is broken (sometimes by just a few paise) the stops are hit (opening big supply door for Institutions). At this time the breakdown short sellers also step in to further fuel the supply--the supply which fills the institutional demand. As soon as the institutional buyers absorb the supply, there would be no more sellers interested in selling, the bids start pushing the price higher. At point C the pull back sellers step in, further absorbed by the institutions. Now we have the breakout sellers and pullback sellers who have put their stops just above the historical support. Now the manipulator has another job to do--to hit a buy stop. As as soon as it happens the price shoots up. Here the traders like me watching charts whole day long, looking for such lucrative opportunities, place their limit orders just above the short sellers sulking edge--the point C. For me in such a setup, the most important thing is searching for the C point. At every uptick the short sellers would be forced to cover, pushing the price strongly in upward direction and ending the story. Same is true for breakdowns. Trust me, nothing works 100% but somethings gift us with higher probability. I ll try to post some examples. But for that I need a better response. I hope that with this pattern, some traders will be promoted to a smarter category. Regards.
NSE:NIFTYEducation
by Bravetotrade
16
BPCL: Breakout Failure EntryWe dun know yet that whether this course of action will be followed or not but If and when the price breaks out of the channel, below the the moving average, one can look for an aggressive entry at the first bullish sign in the anticipation of a breakdown failure. The trade is riskier but that's the beauty of this trade. Or else if the price breaks on the upside first, beyond 665, that would be a different type of trade. Hit like if you think this information is useful. Trade safe, stay healthy. Best Regards Afraidtotrade
NSE:BPCLLong
by Bravetotrade