SFL: Technical Setup – Can Bulls Take Charge Above ₹726?________________________________________________________________________________
📈 Sheela Foam Ltd. (SFL) – TECHNICAL ANALYSIS
📆 Date: June 17, 2025
🕵️♂️ Timeframe: Daily
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📌 Price Action Analysis – June 17, 2025
Sheela Foam Ltd (SFL) has shown a strong bullish reversal after prolonged selling pressure. The stock rebounded sharply from the discount demand zone near ₹618.75, forming a strong bullish candle on high volume and closing at ₹706.95 — a 5.96% surge in a single session. This price action indicates that buyers have stepped in with force at key support levels, attempting to reverse the previous downtrend.
With price now reclaiming structure above previous lower highs (LH), the change of character is visible. A strong bullish close above ₹713 will add confidence to this developing uptrend.
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📌 Volume Analysis & Market Implication
• Volume surged dramatically to 772.93K, well above the 10 and 20-period moving averages.
• High volume accompanied by a strong candle is a clear sign of institutional buying and aggressive accumulation.
• The large green bar with a narrow wick suggests sustained buyer control throughout the session.
• Volume-based confirmation supports the potential beginning of a trend reversal from bearish to bullish.
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📌 Technical Indicators – Bullish Signals in Focus
• ✅ Strong Bullish Candle: Sign of momentum reversal.
• ✅ RSI Breakout: RSI reading at 69 (Daily) shows entry into bullish territory.
• ✅ Bullish SuperTrend Signal: Indicates a switch to positive bias.
• ❌ Volume Dry-Up: Not Yet: But overall contraction count (37) hints at base building.
• ❌ Breakout Signal: Pending: Still under the critical 726–745 zone.
• ✅ CCI + MACD Bullish (D/W): Early confirmation of upward momentum.
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📌 VCP Dashboard & Pattern Setup – Breakout in Formation
SFL has shown Volume Contraction (VCP) signs with 37 recorded contractions.
Although volume dry-up and confirmed breakout signals are still pending, the recent spike with a bullish candle + RSI breakout and BB Squeeze Off shows that momentum is shifting.
Watch closely for a breakout above the Resistance 1: ₹726.28 — this may confirm a full VCP breakout.
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📌 Key Swing Low – Bullish Reversal From ₹618.75
The strong bullish move has emerged from a well-tested demand zone near ₹618–622, aligning with a swing low and multiple volume-supported bounces in the past. This zone reflects strong buyer interest and may continue to serve as a base for further upside.
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📌 Key Resistance Zones Ahead
To sustain the uptrend, price must cross and hold above the following levels:
• 🔺 Resistance 1 – ₹726.28: Immediate level to watch for a breakout
• 🔺 Resistance 2 – ₹745.62: Mid-level hurdle
• 🔺 Resistance 3 – ₹778.23: Major barrier; potential profit-booking zone
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📌 Key Support Zones (Should Hold to Sustain Trend)
• 🟢 Support 1 – ₹674.33: Nearest pullback support
• 🟢 Support 2 – ₹641.72: Below this could weaken the structure
• 🟢 Support 3 – ₹622.38: Demand zone – trend invalidation below here
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📌 Swing High & Supply Zone – ₹1,058.7
• This level marks the premium supply zone where the stock last topped out.
• A breakout beyond this zone would indicate long-term reversal strength, but in the near term, it remains a distant resistance.
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📌 STWP Trade Details – Confidence Level: 88.35%
• Entry Price: ₹713.00
• Stop Loss: ₹659.85
• Risk per Share: ₹53.15
• Loss: ₹2,658 for Qty 50
• Setup: Strong Bullish Candle, High Volume, RSI Breakout
• Trade Type: Potential VCP Breakout with Strong Momentum
📈 Risk Reward (Potential): If breakout sustains, RR can extend beyond 1:2+
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📌 What Could Go Wrong? (Risk Perspective)
• Failure to hold ₹674 on closing basis may invite profit-booking.
• Breakdown below ₹641–622 zone would nullify the bullish thesis.
• Absence of volume dry-up may slow down the breakout confirmation.
As long as price sustains above ₹706 and continues building volume near ₹726+, bullish structure remains valid.
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📌 What to Expect Next?
• Break above ₹726.28 would confirm breakout from recent consolidation.
• Upside target zones are ₹745 → ₹778 in short term.
• If consolidation happens below ₹726 but above ₹674, it may offer re-entry for positional players.
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📌 Final Words for Learners
This setup reflects a textbook example of a VCP Base forming with a possible breakout ahead.
Strong demand zone rejection + volume spike + technical confirmation = early-stage opportunity.
But remember: no setup is guaranteed — manage your risk smartly, define your exit, and follow your plan.
⚠️ Patience and discipline are key to riding the full wave.
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📌 Disclaimer
• Educational content only — not a buy/sell recommendation.
• Do your own research and consult a SEBI-registered advisor.
• Author is not SEBI-registered; trades are illustrative only.
• Trading and investing involve risk.
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👇 Your Take on SFL?
• Will Sheela Foam break out above ₹726 or consolidate further?
• What levels are you watching? Share your charts and thoughts below!
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