Watchlist: Stock is About to Break ‘Key’ Resistance!
The cheerful mood of the Indian markets helped a lot of stocks to stage a successful comeback in the first trading session of 2023 and shares of Symphony (NS:) were among those. It is a well-known brand that makes air coolers (both commercial and residential) and sells them in the domestic as well as the international markets.
Since the second half of 2022, the stock is more or less trading in a wide range. Investors kept supporting the price whenever it dipped to around INR 825 to INR 850 during the last six months and an equivalent selling pressure was seen near the resistance of INR 950. Today, as the index rallied 0.69% to 9,798.6, the share price of Symphony jumped 2.69% to INR 929.2, depicting a noticeable outperformance.
Image Description: Daily chart of Symphony with volume bars at the bottom
Image Source: Investing.com
This outperformance was not the sole reason that the stock came on my radar, but the chart structure of it. After rallying from INR 820 to a high of INR 949, the stock took a breather and the price retraced around 61.8% from there which is one of the Fibonacci levels. These retracement levels are keenly watched by many traders to spot an entry as soon as the stock tends to reverse its course.
After touching this famous 61.8% retracement level, the share price of Symphony took a U-turn and resumed its journey to the north. As mentioned earlier, the stock is still in the broad range and is now heading to the upper resistance of it, which is around INR 950. Once this level is taken out, a one-way rally could start which might be sufficient to propel the stock to around INR 1,080. Therefore investors hunting for a long opportunity might want to keep this counter on the radar.
For those who are a bit aggressive in their trading, an entry point even before the resistance could also work. I am expecting the stock to break the hurdle this time as the volume in today’s session while the stock is approaching INR 950 has expanded. A total of 32.8K shares exchanged hands today, which is 77% higher than the 10-day average volume of 18.5K shares. This is not a breakout so a very high volume is not required, but a volume expansion as the trend picks up pace is a good sign of the continuation of the move.
In case the tide turns, the U-turn level, i.e. INR 870 would be a good support level, and if breached from above, then the bulls might want to re-evaluate their positions.