Technical Analysis: MERICO LTDTrend and Structure:
The chart shows a strong uptrend leading up to a recent pullback.
After the pullback, price is consolidating between a support zone (~708 INR) and a resistance zone (~720 INR).
There is a clear weekly support level marked around 690-695 INR below the support zone.
Volume is moderate but showing no large spikes, indicating potential consolidation.
Support and Resistance:
Immediate resistance zone is around 718-721 INR, acting as short-term overhead supply.
The support zone is roughly between 707-710 INR, serving as a base for potential bounce.
The weekly level below (roughly 690-695 INR) may act as a strong support if price breaks current support.
Price Projections:
The drawn projection suggests a short-term dip toward the support zone, followed by a strong bounce above the resistance.
This implies a possible bullish continuation after a minor correction or consolidation.
Volume:
Volume during consolidation is relatively steady.
Watch for volume pickup on a breakout above resistance for confirmation.
Trading plan:
Entry:
Consider entering a long position near or just above the support zone (~708-710 INR) when there is confirmation of buying interest (e.g., bullish reversal candlestick or volume spike).
Alternatively, a breakout entry can be taken above the resistance zone (~720-722 INR) with volume confirmation.
Stop Loss:
Place a stop loss below the support zone or slightly below the weekly level, around 700-705 INR to protect against downside risk.
Targets:
Initial target near the resistance breakout level (~720-725 INR).
Secondary target around 745-750 INR based on the upward arrow projection, representing the next resistance area.
Risk-Reward:
Risk: Approximately 8-10 INR per share.
Reward: Potential gain of 35-40 INR per share.
Favorable risk-reward ratio around 3:1 or better.
Additional Notes:
If the price falls below the support zone and weekly level with strong volume, consider exiting or avoiding long positions.
Look for confirmation signals before entry to reduce false breakouts or breakdowns.
Summary:
Table
Parameter Details
Entry Price ~708-710 INR (on support)
Stop Loss ~700-705 INR
Target 1 ~720-725 INR
Target 2 ~745-750 INR
Trend Pullback in uptrend
Risk-Reward Ratio ~3:1 or better
