Kajaria - double bottom reversal pattern confirmation.NSE:KAJARIACER Made a Beautiful Chart Structure of a double bottom reversal pattern confirmation with pivot levels broken after Q4 Results and an FTA Deal, with Good Price and Volume action, which is increasing daily.
Price Action:
- The stock has experienced a prolonged downtrend from December 2024 to April 2025
- Currently showing a strong reversal with price at ₹931.30, up (+7.53%) in today's session
- Critical breakout above key resistance level (₹900-910)
- Strong bullish candle today with substantial range, indicating decisive buying pressure
Volume Analysis:
- Today's volume at 2.16M shares vs. average of 969.71K (more than 2x normal volume)
- Volume expansion on bullish moves in late April and mid-May suggests institutional accumulation
- Volume pattern shows increasing participation during recent rally phases
- Previous resistance tests (red arrows) occurred on a lower volume, explaining the failed breakouts
Key Supports and Resistances:
- Major resistance just broken at ₹900-910 zone (red horizontal line)
- Multiple previous rejection points at this level (red arrows)
- New support established at ₹775-780 range (green horizontal line)
- Double bottom formation at the support confirms its significance
- Next major resistance likely around ₹1,000 (psychological level)
Technical Patterns:
1. Double Bottom - Formed at ₹775-780 level in April-May (green arrows)
2. Resistance Breakout - Clear breach of ₹900-910 level with volume confirmation
3. Higher Lows - Recent price structure showing increasing buyer strength
5. Basing Pattern - Consolidation between ₹775-910 created solid base for breakout
Trade Setup:
- Pattern: When Resistance breaks out with a downtrend line break
- Confirmation: Today's strong price action above ₹910 with volume expansion
- Context: Possible trend reversal after prolonged downtrend
Entry Points:
1. Aggressive Entry: Current price (₹931.30) with partial position
2. Pullback Entry: On retest of breakout level ₹900-910 (if it occurs)
3. Momentum Entry: Add positions on close above ₹950 with continued volume strength
Exit Strategy:
- Target 1: ₹1,000 (psychological resistance)
- Target 2: ₹1,100 (previous support turned resistance)
- Target 3: ₹1,200 (major resistance from December)
- Trailing Stop: Implement a 5% trailing stop after Target 1 is achieved
Stop Loss Placement:
- Aggressive Stop: ₹890-895 (just below the breakout level)
- Conservative Stop: ₹850 (recent swing low)
- Pattern-Based Stop: ₹775 (below the double bottom support)
Risk Management:
- Position sizing: Limit risk to 1-2% of trading capital
- Risk-reward ratio: Maintain at least 1:1.5 (with aggressive stop)
- Consider scaling in on confirmation and scaling out at each target level (e.g., 30% at each target)
Keep in the Watchlist.
NO RECO. For Buy/Sell.
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Disclaimer: "I am not SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational and educational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
