Balkrishna Industries (BALKRISIND) Monthly Chart Analysis

31 Des 2024

The technical setup combines Fibonacci retracements, trendlines, and moving averages to reveal key insights into future price action.

The following analysis covers key support and resistance levels, bullish and bearish scenarios, and potential trade opportunities.


Trend Overview:

• The stock is in a long-term uptrend, supported by a rising trendline that has acted as a strong base.
  
• Recent corrections indicate a healthy retracement within this uptrend.
  

Fibonacci Retracement Levels:

The Fibonacci retracement is drawn from a major swing low to swing high.

Key levels:

23.6% at 3,096.30.

38.2% at 2,966.30 (currently breached).

50% at 2,785.30 (tested as support).

61.8% at 2,605.30 (a critical level for buyers).

78.6% at 2,466.30 (final support zone).

Support Zones:

Primary Support: 50% retracement at 2,785.30 coinciding with EMA-21 (~2,661.59).

Secondary Support: 61.8% retracement at 2,605.30 aligned with a consolidation zone.

The long-term trendline also intersects around these levels, adding confluence.

Resistance Zones:

Immediate Resistance: 23.6% retracement at 3,096.30.

Strong Resistance: Previous swing high near 3,374.30.

Psychological resistance at 3,500.

Exponential Moving Averages (EMAs):

EMA-9 at 2,850.54 is currently supporting the price.

EMA-21 at 2,661.59 aligns with the 50% Fibonacci level, acting as a critical support zone.

The EMAs are in a bullish crossover, indicating long-term strength despite short-term corrections.

Volume Analysis:

Monthly volumes are consistent, with higher volumes during bullish candles, signaling strong institutional interest.

The recent pullback has seen declining volumes, suggesting a lack of aggressive selling.

Bullish Scenario:

If the price holds above the 50% retracement (2,785.30) and regains 3,096.30, the uptrend could resume.

Breakout above 3,374.30 may lead to new all-time highs, targeting 3,826.20 as per the Fibonacci extension.

Bearish Scenario:

A breakdown below the 61.8% retracement (2,605.30) and the long-term trendline could invalidate the uptrend.

Further downside could target the 78.6% retracement at 2,466.30 and psychological support at 2,400.



Trade Plan

For Bulls:

Entry: Near 2,785.30 (50% retracement) with confirmation of reversal signals.

Target 1: 3,096.30 (23.6% retracement).

Target 2: 3,374.30 (previous high).

Target 3: 3,826.20 (Fibonacci extension).

Stop Loss: Below 2,605.30 (61.8% retracement).

For Bears:

Entry: On breakdown below 2,605.30 with strong bearish momentum.

Target 1: 2,466.30 (78.6% retracement).

Target 2: 2,400 (psychological level).

Stop Loss: Above 2,785.30.