Possible Momentum Shift in Lokesh MachinesOn Friday, Lokesh Machines experienced a notable gap-up opening, indicating a significant increase in demand at the start of the trading session. Currently, the stock appears to be on the verge of filling this gap, a common trading strategy employed by many market participants.
Gap filling occurs in the context of imbalances between supply and demand. When a stock presents a gap in its price movement, it often highlights a disconnect where buyers and sellers may have differing views on the fair value of the stock. As the price approaches the gap area, it is likely to encounter a zone of interest where buyers and sellers converge on what they perceive as a 'fair' price. This activity can result in increased trading volume as market participants execute transactions that effectively fill the gap.
In this specific instance, the trading volumes observed may suggest a positive momentum shift. Once the stock reaches the identified demand zone between 387 and 395, I anticipate that it has the potential to advance toward the next resistance level at 465. This movement could represent a potential short-term return of approximately 17%, contingent upon favourable market conditions.
