Delta Manufacturing Ltd. Based on Symmetrical Triangle Pattern

21 Nov

1. Pattern Analysis
- Symmetrical Triangle Pattern:
- Timeframe: 3.4 Years
- Description: The price has been forming a symmetrical triangle, characterized by a series of higher lows (support) and lower highs (resistance). This pattern signifies indecision in the market, often resolving in a sharp breakout or breakdown.
- The narrowing range between ₹75 (support) and ₹115 (resistance) highlights increasing compression, signaling an imminent move.

2. Volume Analysis
- Volume Behavior:
- Volume has been consistently declining throughout the formation of the triangle, which is typical of this pattern, indicating accumulation or distribution.
- A sharp increase in volume is expected at the breakout point to confirm the direction.

3. Price Action Analysis
- Key Resistance Level:
- ₹115: The upper boundary of the triangle, serving as the breakout level for a bullish move.
- Support Levels:
- ₹75: The lower boundary of the triangle, which provides a critical support level.
- Candlestick Analysis:
- Current candlesticks show a consolidation phase near the mid-range of the triangle, reflecting indecision. A breakout candlestick with strong volume would validate the move.

4. Validation of Signal
- A breakout above ₹115 with increased volume would confirm a bullish breakout.
- Conversely, a breakdown below ₹75 with strong volume would indicate a bearish move.

5. Target Setting
- Symmetrical Triangle Target Calculation:
- Height of the triangle: ₹115 - ₹75 = ₹40.
- Bullish Target: ₹115 + ₹40 = ₹155.
- Bearish Target: ₹75 - ₹40 = ₹35.

- Incremental Bullish Targets:
- Target 1: ₹130 (+15% from ₹115).
- Target 2: ₹155 (+35% from ₹115).

6. Entry and Stop Loss
- Entry Levels:
- Bullish: Enter above ₹115 after breakout confirmation.
- Bearish: Enter below ₹75 after breakdown confirmation.
- Stop Loss:
- Bullish Setup: Place a stop loss at ₹100, below recent consolidation.
- Bearish Setup: Place a stop loss at ₹85, above recent consolidation.

7. Trade Setup Summary
- Bullish Setup:
- Entry: Above ₹115.
- Targets: ₹130, ₹155.
- Stop Loss: ₹100.
- Bearish Setup:
- Entry: Below ₹75.
- Targets: ₹60, ₹35.
- Stop Loss: ₹85.

8. Final Notes
Delta Manufacturing Ltd. is at a critical juncture, with the symmetrical triangle nearing its apex. A breakout in either direction, confirmed by volume, will present a high-probability trade setup. Traders should monitor the ₹115 and ₹75 levels closely, as they will determine the trend direction.