Lyka Labs Ltd. 155 [LYKALABS]– Rectangle Pattern (2.5 Years)

hace 3 días

1. Rectangle Pattern Overview
- Formation Details:
- The stock exhibits a 2.5-year rectangle pattern, a classic consolidation pattern indicating indecision between buyers and sellers.
- The resistance is clearly identified at ₹160, with multiple failed attempts to breach this level.
- The support zone lies between ₹135-₹140, reflecting consistent buying interest at these levels.
- Significance:
- This prolonged consolidation signifies accumulation, often a precursor to a significant breakout.
- A breakout above ₹160 would indicate renewed bullish momentum, with the potential to target higher price levels.

2. Volume Analysis
- Volume Trends:
- Volume has shown signs of strengthening as the price approaches the upper boundary of ₹160, indicating increased market participation.
- A breakout above ₹160, accompanied by a volume surge, would confirm the bullish move.
- The rising volume during recent price advances underscores growing investor interest and potential accumulation.

3. Key Levels
- Resistance Levels:
- ₹160: Critical breakout level; a decisive close above this will trigger a bullish rally.
- ₹200-₹240: Post-breakout targets based on the height of the rectangle pattern.
- Support Levels:
- ₹135-₹140: Strong support zone and the lower boundary of the rectangle. A breach below this level would invalidate the bullish setup.

4. Price Target Calculation
- The height of the rectangle pattern (₹160 - ₹135 = ₹25) is added to the breakout level:
- First Target: ₹185
- Extended Targets: ₹200 and ₹240

5. Price Action Highlights
- Recent Price Movement:
- The stock is trading near its upper boundary, indicating pressure on the resistance level at ₹160.
- The gradual higher lows within the rectangle indicate a bullish bias as buyers gain control.
- Candlestick Patterns:
- The recent bullish candlesticks reflect buying strength, with minimal selling pressure evident.
- Strong bullish engulfing patterns near support zones further validate the presence of demand.

6. Trade Setup
- Breakout Trade:
- Entry: Above ₹160 on confirmed breakout with high volume.
- Targets:
- Short-Term: ₹185
- Mid-Term: ₹200
- Long-Term: ₹240
- Stop Loss: ₹140 (below support zone) to manage risk.
- Pullback Opportunity:
- If the price retraces after the initial breakout, the ₹160 level could act as a support for a retest, providing a better entry point.

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