The provided chart depicts the price action of Reliance Industries Ltd. on a daily timeframe, showing a potential breakout setup. Here's a detailed analysis of the drawing:
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### **Analysis**:
1. **Support and Resistance Levels**: - **Support**: The green dotted line near **₹1,300** acts as a significant horizontal support zone. It has been tested multiple times, affirming its strength. - **Resistance**: The red line at **₹1,315.50** serves as a key resistance. The price recently broke above this level, suggesting bullish momentum.
2. **Trendline**: - The green dotted ascending trendline indicates a gradual upward trend, implying that the overall structure remains bullish despite prior corrections.
3. **Breakout Confirmation**: - The price has breached the **₹1,315.50 resistance**, as shown by the blue upward arrow. This indicates a potential breakout with bullish implications.
4. **Candlestick Formation**: - The latest green candle with strong volume confirms buying pressure, further supporting the breakout scenario.
5. **Higher Highs and Higher Lows**: - The price pattern suggests a series of higher highs and higher lows, a classic indicator of an uptrend resumption.
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### **Suggestion for Long Entry**: - **Entry Point**: Consider entering around **₹1,323.30** (current price) or on a slight retracement back to the breakout level of **₹1,315.50** for a better risk-reward ratio. - **Stop-Loss**: Place a stop-loss slightly below **₹1,300** to protect against false breakouts. - **Target**: Aim for ALL TIME HIGH - **Risk-Reward**: Ensure the trade maintains at least a 1:2 risk-reward ratio.
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This analysis suggests that the setup looks favorable for a long position, but it’s essential to monitor volume and momentum indicators for confirmation. Always align trades with your risk management rules.
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