NHPC - Medium Term Analysis

11 Jul

### Volume Contraction Pattern
1. **Ascending Triangle**: The price action forms an ascending triangle, which is typically a bullish continuation pattern. The price is making higher lows while the resistance level remains relatively flat.
2. **Volume**: There's a noticeable decrease in volume during the formation of the triangle, which is common as traders await a breakout.

### RSI Breakout
1. **RSI Indicator**: The Relative Strength Index (RSI) is breaking above the downtrend line, which is a bullish signal indicating increasing momentum.
2. **Current RSI Level**: The RSI value is 73.30, which is in the overbought territory. This could imply strong buying pressure, but also warrants caution for a potential pullback.

### Price Levels
1. **Current Price**: The stock is trading at INR 114.07.
2. **Resistance Levels**: Key resistance levels are identified at INR 145.27 and INR 176.28. These levels can serve as potential targets if the breakout sustains.

### Overall Analysis
- **Bullish Outlook**: The breakout above the ascending triangle's resistance, combined with the RSI breakout, suggests a strong bullish momentum.
- **Volume Confirmation**: Ideally, a breakout should be accompanied by an increase in volume to confirm the strength of the move.
- **Caution on Overbought RSI**: Although the RSI breakout is bullish, the overbought level suggests that there might be a short-term pullback before the price continues higher.

### Strategy
- **Entry**: Consider entering a position if the price sustains above the breakout level with increased volume.
- **Targets**: Set targets around the identified resistance levels (INR 145.27 and INR 176.28).
- **Stop-Loss**: Place a stop-loss slightly below the breakout level or the most recent swing low within the triangle to manage risk.

This analysis assumes a bullish bias given the technical indicators. However, always consider broader market conditions and perform due diligence before making any trading decisions.