Chart Analysis | Cup & Handle BreakoutStock: One 97 Communications Ltd (NSE: PAYTM)
Pattern: Cup & Handle Breakout
Volume Surge: 7.39M vs avg 4.15M
Current Price: ₹924.35
Timeframe: Daily
Breakout Candle: Strong bullish close above recent swing highs
Educational Insight: What Are CAM Stocks?
CAMs (Central Auction Mechanism Stocks) are stocks with higher margin requirements and periodic short-sell restrictions. They are often:
Highly volatile
Liquidity-sensitive
Prone to sharp reversals
Hence, trading them requires strong technical confirmation, strict risk management, and awareness of intraday circuit limits.
Understanding the Pattern:
The Cup and Handle is a bullish continuation pattern. After forming a rounded bottom (the cup), a short consolidation (the handle) offers a potential breakout opportunity. The ideal entry is on breakout with volume, as seen on PAYTM’s chart.
Key Levels to Watch:
🔴 Resistance / Potential Target Zones:
R1: ₹941.02
R2: ₹957.68
R3: ₹986.37
🟢 Support / Risk Management Zones:
S1: ₹895.67
S2: ₹866.98
S3: ₹850.32
How to Trade This Setup (Educational Purpose):
Entry: Traders often look to enter near ₹910–₹925 range on breakout confirmation.
Stop-Loss: Below the handle or nearest support, e.g., ₹895 or ₹866.
Target Zones: Partial profit booking around ₹941, trail rest toward ₹986 based on strength.
Volume Check: Ensure volume remains supportive — ideally above average on up days.
Risk Management: Never risk more than 1–2% of capital on a single trade.
Why This Matters:
Such patterns are favored for their reliability when backed by volume and broader market support. While past performance doesn't guarantee future results, understanding the structure helps improve decision-making.
⚠️ Risk Management Tip: 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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