Hello, fellow traders!
Today, we’ve spotted a swing trading opportunity in Poonawalla Fincorp Ltd that looks promising. If you’re a fan of technical setups and trend reversals, you’ll want to keep an eye on this one. Let’s dive into the details of this potential trade.
Key Levels and Support on Weekly Charts
Looking at the weekly charts, the stock has bounced back from a crucial support level of ₹370. This price point has been tested multiple times, signaling a strong area of support for the stock. Each time the stock revisits this level, it holds firm, indicating that buyers are stepping in to push the price higher.
The repeated tests and rebounds from ₹370 make this an important zone. If the support holds again, we could see a significant uptrend building from here.
Double Bottom Pattern on Daily Charts
When we move to the daily charts, things get even more interesting. The stock has formed a double bottom pattern at ₹370, and it’s now testing the neckline. For those unfamiliar, a double bottom is a reversal pattern that often marks the end of a downtrend. In Poonawalla Fincorp’s case, the previous price action showed a solid downtrend, with the stock selling off aggressively.
However, with the formation of the double bottom and the recent retest of this neckline, there’s a strong chance we’re witnessing the beginning of a new uptrend. Adding further confirmation is the EMA 9 crossing above EMA 21, which signals the start of a bullish phase. We’ve also noticed that the stock has been testing the EMA 9 as a dynamic support before pushing higher—a classic sign that momentum is shifting.
Hourly Chart Confirmation: Trendline Break
Zooming into the hourly charts, we get further confirmation of the potential upmove. The stock has broken out of its falling trendline, and a higher high has been formed. This break of the downtrend and creation of a new higher high is a clear signal that the stock is ready to rally.
The Swing Trade Setup
Now, let’s talk numbers:
- Entry Point: Around ₹395
- Stop Loss: ₹370
- Target: ₹470 (with the potential for more!)
This trade setup gives us a risk-to-reward ratio of 1:3, which is ideal for swing traders looking for high-probability trades with favorable returns. The stop-loss level is just below the strong support at ₹370, ensuring that we have a well-defined exit point if the trade goes against us.
Final Thoughts
This is shaping up to be a solid opportunity for a long trade in Poonawalla Fincorp Ltd. The combination of strong support, a double bottom, bullish EMA crossover, and a trendline break provides multiple confirmations for an upside move. As always, it’s important to stick to your plan and manage risk properly.
Disclaimer:
The stock market carries inherent risks, and there is no guarantee of success with any trade. The analysis provided here is for informational purposes only. Always do your own research and consult with your financial advisor before making any trading decisions.
