TECHNICAL ANALYSIS of Edelweiss financial services
Please note that this analysis is only for educational purposes. I am not giving you any kind of recommendation. Its my analysis for myself. You can use this post as educational purposes. Thank you!
### **Technical Analysis:**
1. **Ascending Triangle Pattern:**
- The chart shows an *ascending triangle pattern,* which is a bullish continuation pattern. The price is making higher lows, indicating increasing buying pressure, while the resistance zone around **115-116 INR** is acting as a strong barrier.
2. **Volume Analysis:**
- The volume has been decreasing during the consolidation phase, which is typical before a breakout. A significant increase in volume during the breakout would confirm the pattern and signal a potential strong upward move.
3. **Support and Resistance:**
- **Support:** The rising trendline acts as dynamic support, with immediate support around **112 INR** and stronger support near **108 INR.**
- **Resistance:** The resistance zone is between **115-116 INR.** A breakout above this level with strong volume would indicate bullish momentum.
### **Trade Setup:**
#### **Entry:**
1. **Bullish Scenario (Breakout):**
- **Entry Point:** Enter a long position when the price closes above **116 INR** on strong volume. This confirms a breakout from the ascending triangle.
2. **Bearish Scenario (Breakdown):**
- **Entry Point:** Consider a short position if the price breaks and closes below the trendline support around **112 INR** with increased volume. This would indicate a possible bearish reversal.
#### **Stop-Loss (SL):**
1. **Bullish Scenario:**
- **Stop-Loss:** Place the SL below the recent swing low or the trendline, around **112 INR.** This level acts as strong support, and a breakdown below it would invalidate the bullish setup.
2. **Bearish Scenario:**
- **Stop-Loss:** Set the SL just above the breakdown point, around **114 INR,** to protect against a false breakdown.
#### **Exit:**
1. **Bullish Scenario:**
- **Target 1:** The first target could be set around **120-122 INR,** based on the height of the triangle pattern added to the breakout point.
- **Target 2:** If the bullish momentum continues, the next target could be around **128-130 INR,** which is near the next significant resistance zone.
2. **Bearish Scenario:**
- **Target 1:** The first target for the short position could be around **108 INR,** where there is a strong support level.
- **Target 2:** If the price continues to decline, the next target could be around **100-102 INR,** where there is a psychological and technical support level.
### **Conclusion:**
- **Bullish Breakout:** Watch for a breakout above **116 INR** with increased volume for a long position.
- **Bearish Breakdown:** Monitor the **112 INR** level for a breakdown to consider a short position.
- **Volume Confirmation:** In both scenarios, confirm the move with volume to avoid false breakouts or breakdowns.
This setup offers a balanced risk-reward ratio, allowing you to capitalize on the directional move following the breakout or breakdown.
### **Technical Analysis:**
1. **Ascending Triangle Pattern:**
- The chart shows an *ascending triangle pattern,* which is a bullish continuation pattern. The price is making higher lows, indicating increasing buying pressure, while the resistance zone around **115-116 INR** is acting as a strong barrier.
2. **Volume Analysis:**
- The volume has been decreasing during the consolidation phase, which is typical before a breakout. A significant increase in volume during the breakout would confirm the pattern and signal a potential strong upward move.
3. **Support and Resistance:**
- **Support:** The rising trendline acts as dynamic support, with immediate support around **112 INR** and stronger support near **108 INR.**
- **Resistance:** The resistance zone is between **115-116 INR.** A breakout above this level with strong volume would indicate bullish momentum.
### **Trade Setup:**
#### **Entry:**
1. **Bullish Scenario (Breakout):**
- **Entry Point:** Enter a long position when the price closes above **116 INR** on strong volume. This confirms a breakout from the ascending triangle.
2. **Bearish Scenario (Breakdown):**
- **Entry Point:** Consider a short position if the price breaks and closes below the trendline support around **112 INR** with increased volume. This would indicate a possible bearish reversal.
#### **Stop-Loss (SL):**
1. **Bullish Scenario:**
- **Stop-Loss:** Place the SL below the recent swing low or the trendline, around **112 INR.** This level acts as strong support, and a breakdown below it would invalidate the bullish setup.
2. **Bearish Scenario:**
- **Stop-Loss:** Set the SL just above the breakdown point, around **114 INR,** to protect against a false breakdown.
#### **Exit:**
1. **Bullish Scenario:**
- **Target 1:** The first target could be set around **120-122 INR,** based on the height of the triangle pattern added to the breakout point.
- **Target 2:** If the bullish momentum continues, the next target could be around **128-130 INR,** which is near the next significant resistance zone.
2. **Bearish Scenario:**
- **Target 1:** The first target for the short position could be around **108 INR,** where there is a strong support level.
- **Target 2:** If the price continues to decline, the next target could be around **100-102 INR,** where there is a psychological and technical support level.
### **Conclusion:**
- **Bullish Breakout:** Watch for a breakout above **116 INR** with increased volume for a long position.
- **Bearish Breakdown:** Monitor the **112 INR** level for a breakdown to consider a short position.
- **Volume Confirmation:** In both scenarios, confirm the move with volume to avoid false breakouts or breakdowns.
This setup offers a balanced risk-reward ratio, allowing you to capitalize on the directional move following the breakout or breakdown.
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