Pattern Identification: Support and Resistance
Time Frame: Daily Chart
Key Observations:
Support and Resistance Zones:
Resistance Zone:
The stock faces resistance around Rs. 2300-2350 after attempting to break out of this level. This has been marked as the upper blue dashed line.
Support Levels:
The first significant support zone was around Rs. 1900-1950 (middle dashed line), and it held up well during the previous consolidation phase.
Another notable support level is around Rs. 1600-1650 (bottom dashed line). This zone acted as strong support earlier, as indicated by a significant bounce in price.
The zones around 1900 and 1600 offer strong support in case of any pullbacks, as these areas previously acted as accumulation zones.
Consolidation Breakout:
The stock had been in a consolidation pattern between Rs. 1900 and 2200 from July to September. Recently, it broke above the 2200 level, indicating a bullish breakout.
The long consolidation phase between prices 1900 and 2200 appears to be over, and the breakout suggests renewed interest from buyers.
Volume Consideration:
Volume is a crucial factor in confirming the strength of the breakout. A surge in volume during an upward breakout above 2300 would add credibility to the move, indicating strong buying pressure.
If volume is weak, there is a chance of a false breakout, and the price may return to the consolidation range.
Possible Scenarios:
Current Price Action: The stock is trading close to Rs. 2284 but is still below the resistance zone of 2300-2350. The resistance is being tested, and any breakout beyond this will likely signal strong bullish momentum.
Bullish Case: If the stock successfully breaks and closes above the 2300-2350 resistance level with high volume, we may see a strong upward move toward higher targets, possibly around 2400-2450 and beyond.
Bearish Case: If the stock faces rejection at the 2300-2350 level, a pullback toward the support around 2200 or even 1900 may occur. This would provide a re-entry opportunity for long-term investors.
Conclusion:
The Whirlpool stock chart is showing signs of a bullish continuation as it approaches the crucial resistance level of 2300-2350. Traders should watch closely for a breakout confirmation with volume. A breakout could lead to significant gains, while a failure at resistance may lead to consolidation or a pullback to lower support levels.
Disclaimer:
The information provided in this article is for educational and informational purposes only and should not be considered financial advice. Investment in the stock market involves risk, and you should research or consult a licensed financial advisor before making any investment decisions.
News of the day:
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SEBI has issued demand notices totaling ₹1.03 crore to industrialist Venugopal Dhoot and two other entities in an insider trading case related to Videocon Industries’ shares. The notices include a warning of potential arrest and asset attachment if the payment is not made within 15 days. This action follows Dhoot and the entities’ failure to pay the fine imposed by SEBI in 2021.
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Morgan Stanley has stated that the Indian stock market remains in a “sweet spot,” despite expectations of sub-par equity returns globally. Ridham Desai, an equity strategist at Morgan Stanley, noted that small and mid-cap stocks continue to “defy gravity” by rising amidst concerns. The brokerage also warned that the upcoming state elections in Maharashtra and Haryana could pose inflation risks.
