CNXIT BULLISH !
1. Resistance Breakout:
- The index has historically faced selling pressure at 38,653 - 38,405 Zone, causing it to reverse or pause its upward movement.
- When a stock breaks above a strong resistance level, it means that buying demand has overwhelmed the selling pressure at that price point. This breakout is a positive sign, indicating that the chart may move higher, especially if it is a clean break (i.e., it closes significantly above the resistance level).
- The **strength of the breakout** is often measured by the volume of trading activity. If the breakout occurs on **high volume*, it indicates that a large number of market participants are involved, adding credibility to the When a stock breaks through a strong resistance level and retests that level with good volume, it can signal a strong bullish move. Here's a detailed breakdown:
2. Retest of the Resistance Level:
- After the breakout, it’s common to see a retest of the previous resistance level, which now acts as a support level. This retest occurs as some traders may take profits, or there may be some temporary selling pressure as the market re-evaluates the new price.
- If the stock successfully holds above the previous resistance (now support) on the retest, it confirms that the breakout was valid. This gives bulls (buyers) more confidence that the level will hold and that the stock has further upside potential.
3. Volume Confirmation:
- A retest with good volume is essential. If the stock holds the new support on strong volume, it signals that buyers are stepping in to defend the level, further reinforcing the idea that the stock is in a bullish phase.
- Conversely, if the retest occurs on low volume, it may indicate a lack of conviction from buyers, and the breakout may be prone to failure.
4. Bullish Expectations:
- When a stock breaks out of resistance and successfully retests it with strong volume, the expectation is that the stock will enter a new bullish trend. The prior resistance has now been transformed into a solid base of support, and the stock may experience momentum buying, pushing prices higher.
- Traders often see this scenario as a low-risk, high-reward setup. Their stop-loss would typically be placed just below the new support level, while the upside target could be based on previous price patterns, such as Fibonacci extensions or previous highs.
5.Target :
- it is on its all-time high targets on fib zones,pivots 0r based on future price action basis.
# Summary:
- **Breakout of strong resistance Indicates potential for higher prices.
- **Retest of resistance as support Confirms strength of the move if support holds.
- **Good volume on retest: Adds confidence in the bullish move.
- **Bullish expectation Likely continuation of the upward trend.
This combination forms a high-probability bullish setup in technical analysis.
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