Price Action, Demand Zones, and Low-Risk Entry Areas📊 Tata Chemicals – Technical Chart Study
🗓️ Date: May 22, 2025 | NSE: TATACHEM | Chart Type: Daily
**Price Action:**
Since mid-April 2025, the stock has exhibited an uptrend characterized by higher lows and higher highs, which is generally considered a positive sign of market strength. The current price stands at 900.40, supported by a strong green candle that closed near its daily high. This recent price movement suggests buying interest in the stock, indicating potential for further upward movement. However, investors are advised to conduct their own analysis and consider market conditions before making any decisions.
**Chart Pattern Analysis:**
TATACHEM is showing a Volatility Contraction Pattern (VCP), with several contraction phases visible since March. The price has been trading within a tightening range of approximately 860 to 900, forming a recognizable pattern handle. During this period, volume declined gradually, which is typical in a VCP setup and may indicate absorption by stronger hands. The last few sessions before the breakout showed tight-range candles with lower volumes and mildly positive delta, often seen as a sign of accumulation. The breakout on May 27 came with approximately double the average volume, suggesting increased participation. While this pattern can indicate a higher probability of continuation, traders should evaluate risk carefully and not rely solely on any single pattern.
**Footprint Analysis:**
Footprint data for TATACHEM leading up to the breakout shows signs of increased buyer activity. The session on May 27 recorded total volume near 1.75 million and a positive delta of +174,050, suggesting buyers were more aggressive than sellers. Previous sessions showed fluctuating delta values, indicating a gradual shift from selling pressure to buying control. This trend may reflect a period of accumulation, with sellers becoming less dominant. Despite these observations, it is important to note that past volume and delta patterns do not guarantee future price movements.
**Demand Zones:**
Potential demand zones have been identified at key price levels: between 886.70 and 871.05, 863.90 and 851.50, and 842.85 and 834.55. These areas could act as support where buying interest may emerge if the stock experiences a pullback. Monitoring these zones can help investors plan entries, but it is essential to consider overall market dynamics and perform due diligence before trading.
**Low-Risk Entry Zone:**
TATACHEM recently entered a zone between 895 and 900 that may offer a lower-risk entry opportunity, with a brief intraday breach observed. For additional confirmation, a sustained close above 900 to 905 accompanied by above-average volume could suggest continuation strength. A potential stop loss could be placed below the handle low near 860, implying a risk of roughly 4.5%. This setup may offer a favorable risk-reward balance, but traders should assess their risk tolerance and market conditions before making decisions.
⚠️ 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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