POLYCAB - Breakdown From Distribution Range

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💹 Polycab India Ltd (NSE: POLYCAB)

Sector: Electricals / Cables | CMP: 7079.5
View: Bearish — Breakdown From Distribution Range

POLYCAB has decisively slipped below its short-term consolidation zone, following a failed attempt to sustain above the 7600–7800 supply region. The rejection from this upper band was sharp and volume-backed, confirming distribution at higher levels rather than healthy consolidation. Recent candles show downside continuation with expanding volatility, keeping the immediate bias tilted to the downside.

Structurally, the stock has transitioned from an uptrend into a lower-high formation, with price now trading below key short-term averages. RSI around 38 reflects weak but not oversold momentum, indicating that downside pressure still has room to play out. MACD remains in bearish territory, while ADX suggests the trend is developing rather than exhausted. This combination favours continuation moves over mean-reversion bounces.

Volume behaviour is a key tell. The recent sell-off has come with very high participation (Vol-X ~9+), signalling active institutional repositioning rather than retail-driven noise. Importantly, selling has not yet shown capitulation characteristics, implying that weakness may persist until a stronger demand pocket is tested.

Key Support & Resistance Zones (Chart-Based)

Resistance Zones:
• 7270 (near-term supply / pullback cap)
• 7460.5 (intermediate resistance)
• 7580 (major overhead resistance, prior distribution zone)
• 7800–7900 (weak but broad HTF supply band)

Support Zones:
• 6960 (Support 1 – immediate reaction level)
• 6840.5 (Support 2 – intermediate demand)
• 6650 (Support 3 – major structural demand zone)

The 6960 level may offer a temporary pause or short-lived bounce, but it is not a trend-defining support. A sustained break below this zone increases downside probability toward 6840.5 and 6650, where stronger demand is likely to emerge. Any pullback toward 7270–7460 is expected to face supply unless accompanied by clear volume contraction and structural improvement.

From a broader risk perspective, POLYCAB is now in a sell-on-rise environment, with trend strength favouring bears and volatility elevated. Long exposure remains high-risk until price reclaims and sustains above the lower resistance band with improving momentum metrics.

Options activity shows increasing alignment with the mark-down structure. Near-ATM PUTs are referenced purely for positioning insight, with balanced-to-negative delta indicating sensitivity to further downside. Rising open interest alongside strong volume points to fresh bearish participation rather than short-covering, while implied volatility remains in a controlled mid-range, suggesting measured risk pricing.

Derivatives participation broadly confirms the cash-market breakdown, with liquidity concentrated near ATM levels and behaviour consistent with informed repositioning. Directional structures remain sensitive to time decay and consolidation, making continued downside acceptance and momentum follow-through essential for validation.

Final Outlook (Educational Snapshot):
Momentum: Weak | Trend: Developing| Risk: High | Volume: Very High

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This document is strictly for educational and informational purposes. All examples, charts, levels, and option structures discussed are illustrative and are not intended as buy, sell, or hold recommendations. STWP does not provide investment advice, trading tips, signals, or personalized financial guidance of any kind, nor is it a SEBI-registered intermediary or research analyst. The analyses, illustrations, and risk–reward structures included here are generic in nature and based on publicly available data and observed market behaviour, which may change without notice. Financial markets involve significant risk; derivatives in particular carry the potential for substantial losses. Option premiums, implied volatility, open interest, delta, and other market variables can fluctuate rapidly and unpredictably.
Readers are solely responsible for their trading decisions, capital management, and risk assessment. Before making any investment or trading decision, please consult a SEBI-registered investment advisor. STWP, its representatives, and affiliates shall not be liable for any direct or indirect loss arising from the use of this material. Historical patterns or past market behaviour do not guarantee future outcomes, nor should any part of this document be interpreted as a promise of performance, accuracy, or returns.

Position Status: No active position in this instrument at the time of analysis.
Data Source: TradingView & NSE India.

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29 minuti fa

Nota

Have already mentioned this - Any pullback toward 7270–7460 is expected to face supply unless accompanied by clear volume contraction and structural improvement.