AUTOAXLESAUTOAXLES – After giving a breakout above the major resistance zone near 1950, price failed to sustain and witnessed a sharp correction towards 1540. However, the recovery from lower levels has been strong, and the stock is now gradually rebuilding its bullish structure by forming higher lows.
For the last 3–4 weeks, price has been consolidating in a tight range after the sharp recovery move. At the same time, volume has been gradually drying up, which is often seen before a momentum expansion move. This kind of price and volume contraction usually indicates that selling pressure is reducing and the stock may be preparing for a directional breakout.
Currently, the 2070 zone remains the key resistance and trigger level. If price manages to break out and sustain above this area with strong participation, then probability of a fresh upside momentum move increases significantly. In that case, the next major target zone can be the old swing high area near 2144.
As long as the higher low structure remains intact, the overall setup continues to look constructive for a potential breakout move.
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