More than just a swing trade opportunity #SAILSAIL is in limelight for the breakout of the Inverse Head & Shoulder pattern and falling channel, so I thought to take a look.
It looks like SAIL is getting ready to resume its uptrend.
• There’s an Inverse Head and shoulder pattern formation with the neckline exactly at a Strong Support & Resistance level .
• We can draw two falling channels on the price chart (Marked as Falling channels 1 & 2 on the chart).
Price has broken above the inverse head and shoulder pattern, falling channel 1 and Strong resistance line.
A breakout above the other falling channel is pending.
For the uptrend to resume and to confirm that the correction has ended, the price has to just sustain the breakout and stay above the Strong resistance at 105. After which sail can go a long way.
Possibilities of breakout failure can not be ruled out, no matter how favorable the market conditions look. Sometimes the scenarios change instantly.
For Swing trade purposes:
Buy level – 108.5 (above falling channel upper line)
SL – 102 (below breakout candle low)
Target – 113, 123, 131
If SAIL starts its up move, it can go way above its previous ATH.
Reason?
• China produces around half of global steel and it’s dragging down the output by reducing production. Other large steel-producing nations including India saw an uptick in production and exports.
• Price hikes are most likely to be announced as coking coal prices are at elevated levels and expected to be there for a long time.
• Indian steel producers will have a better opportunity to increase exports due to the absence of Russia & Ukraine.
China increasing production is the biggest risk. But for the current scenarios, Indian steel manufacturers are in a sweet spot.
SAIL is more than just a swing trade opportunity.
I'm betting on the steel industry to grow all together and not just one stock.
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Disclaimer:
This is not buy/sell advice. Please do your due diligence before making any trading decision or consult your financial advisor.
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