Riba Textiles Ltd. 95.81 [RIBATEX] – Cup and Handle Pattern (5 Y

il y a 3 jours

1. Pattern Overview
- Formation Details:
- The stock has developed a 5-year cup and handle pattern, a strong continuation formation indicating the potential for a bullish breakout.
- The cup portion reflects a gradual decline and recovery, showcasing accumulation over time.
- The handle portion is a short consolidation phase near the resistance, preparing for a breakout.
- The key resistance level is identified at ₹95, which aligns with the top of the pattern.
- Significance:
- This long-term cup and handle pattern is a highly reliable signal of bullish sentiment.
- A breakout above ₹95 signals the resumption of an uptrend, with strong momentum expected.

2. Volume Analysis
- Volume Trends:
- Volume shows increasing participation, especially during the recent rally toward the resistance zone.
- A breakout accompanied by a volume surge would confirm the bullish move.
- The accumulation phase within the handle is characterized by relatively lower volumes, which is typical in such patterns.

3. Key Levels
- Resistance Levels:
- ₹95: Critical breakout level. A sustained move above this will open the path for higher targets.
- ₹130: Projected target based on the height of the cup.
- Support Levels:
- ₹80: Immediate support level, which aligns with the lower boundary of the handle.
- ₹70: Secondary support, below which the bullish structure would be invalidated.

4. Price Target Calculation
- The height of the cup (₹130 - ₹70 = ₹60) is added to the breakout level (₹95):
- First Target: ₹130 (psychological resistance).
- Extended Target: ₹150 (potential follow-through after breakout).

5. Price Action Highlights
- Recent Price Movement:
- The stock is currently testing the critical ₹95 resistance, with bullish candlesticks indicating upward pressure.
- The gradual rise in lows during the handle formation supports the bullish bias.
- Candlestick Patterns:
- The formation of bullish engulfing candles near the ₹80 support indicates strong buying interest.
- A breakout candle above ₹95, preferably a bullish marubozu, would confirm the uptrend.

6. Trade Setup
- Breakout Trade:
- Entry: Above ₹95 on confirmed breakout with significant volume.
- Targets:
- Short-Term: ₹110
- Mid-Term: ₹130
- Extended Target: ₹150
- Stop Loss: ₹80 (below handle support) to minimize risk.
- Pullback Opportunity:
- If the price retests ₹95 after the breakout, it could provide a secondary entry point for traders.

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