** Chart Analysis: What’s Happening?
The chart shows a classic Elliott Wave setup with a potential swing trading opportunity. Here’s the breakdown:
Elliott Wave Structure:
The price appears to have completed a corrective wave (labeled as A-B-C) around the Correction Wave Completion Zone of 937-972. This zone acted as a strong support area, where the price found a base after a sharp decline.
Point b (A) marks the end of the corrective wave, followed by a liquidity buildup at the support zone. This often signals a reversal as buyers step in, absorbing selling pressure.
Key Levels:
Support Zone (937-972): This is where the price reversed, indicating strong buying interest. The note on the chart mentions that a "break up or break down can lead to price movement," which aligns with the breakout we’re seeing.
First Swing Target (1,049): The price has already broken above the support zone and is heading toward this target.
Second Swing Target (1,258-1,296): This is the next major resistance zone, where the price could face selling pressure if the bullish momentum continues.
Stop Loss (Day Close Below 900): A critical level to protect against a failed setup. A daily close below 900 would invalidate the bullish thesis.
Current Price Action:
The price is currently at 939.35 (as of March 19, 2023), showing a slight decline of -0.75 (-0.08%). However, it’s still above the support zone, indicating that the bullish setup remains intact.
The chart shows a breakout above the corrective wave structure, with the price testing higher levels after the reversal at point (A).
** Plan of Action: How to Trade This Setup
Based on the chart, here’s a step-by-step plan for swing trading BRIGADE:
[1] Entry Point :
The price has already broken above the correction wave completion zone (937-972). A good entry would be on a pullback to this zone (around 950-970) with confirmation of support (e.g., a bullish candlestick pattern like a hammer or engulfing candle). Alternatively, aggressive traders can enter on a breakout retest above 950 with strong volume.
[2] Target 1 (1,049) :
This is the first swing target. If the price reaches this level, consider booking partial profits (e.g., 50% of your position) to lock in gains, as this level may act as resistance.
[3] Target 2 (1,258-1,296) :
If the momentum continues, aim for the second swing target. This is a significant resistance zone, so expect potential profit-taking or a reversal here. Be ready to exit the remaining position if signs of weakness appear (e.g., bearish divergence on RSI or a shooting star candlestick).
[4] Stop Loss :
Set a stop loss on a daily close below 900, as indicated on the chart. This ensures you’re protected if the price breaks down and the setup fails.
** Risk Management Tips for Options Trading
Since this is a swing trading setup, options can be a great way to leverage the move while managing risk. Here are some tips:
[1] Choose the Right Strike :
If you’re buying a call option, select a strike price near the current price (e.g., 950 or 1000 strike) to balance cost and potential returns. Avoid deep out-of-the-money (OTM) options, as they have a lower probability of success.
[2] Position Sizing :
Never risk more than 1-2% of your trading capital on a single trade. For example, if your account size is ₹5,00,000, your maximum risk should be ₹5,000-10,000. Calculate your position size based on the difference between your entry and stop loss.
[3] Time Decay (Theta) :
Options lose value as expiration approaches. Choose an expiration date that gives the trade enough time to play out—preferably 30-45 days out for a swing trade like this.
[4] Use Stop Losses :
Even with options, set a mental stop loss based on the underlying stock price (e.g., a daily close below 900). If the trade goes against you, exit the option position to avoid further losses.
[5] Avoid Over-Leveraging :
Options can be tempting due to their leverage, but don’t overexpose yourself. Stick to a small position size to manage risk effectively.
** Summary and Conclusion
To recap, BRIGADE is showing a promising swing trading setup after completing a corrective wave and breaking out above the 937-972 support zone. The price is targeting 1,049 in the short term, with a potential move to 1,258-1,296 if the bullish momentum continues. A stop loss on a daily close below 900 ensures risk is managed. For options traders, focus on proper strike selection, position sizing, and time decay to maximize returns while minimizing risk.
This setup offers a good risk-reward ratio, but always trade with discipline and a clear plan. Happy trading, and may the markets be in your favor!
** Disclaimer
I am not a SEBI-registered analyst, and this analysis is for educational purposes only. Trading and investing involve risks, and you should consult a financial advisor before making any decisions. Always do your own research and trade at your own risk.
The chart shows a classic Elliott Wave setup with a potential swing trading opportunity. Here’s the breakdown:
Elliott Wave Structure:
The price appears to have completed a corrective wave (labeled as A-B-C) around the Correction Wave Completion Zone of 937-972. This zone acted as a strong support area, where the price found a base after a sharp decline.
Point b (A) marks the end of the corrective wave, followed by a liquidity buildup at the support zone. This often signals a reversal as buyers step in, absorbing selling pressure.
Key Levels:
Support Zone (937-972): This is where the price reversed, indicating strong buying interest. The note on the chart mentions that a "break up or break down can lead to price movement," which aligns with the breakout we’re seeing.
First Swing Target (1,049): The price has already broken above the support zone and is heading toward this target.
Second Swing Target (1,258-1,296): This is the next major resistance zone, where the price could face selling pressure if the bullish momentum continues.
Stop Loss (Day Close Below 900): A critical level to protect against a failed setup. A daily close below 900 would invalidate the bullish thesis.
Current Price Action:
The price is currently at 939.35 (as of March 19, 2023), showing a slight decline of -0.75 (-0.08%). However, it’s still above the support zone, indicating that the bullish setup remains intact.
The chart shows a breakout above the corrective wave structure, with the price testing higher levels after the reversal at point (A).
** Plan of Action: How to Trade This Setup
Based on the chart, here’s a step-by-step plan for swing trading BRIGADE:
[1] Entry Point :
The price has already broken above the correction wave completion zone (937-972). A good entry would be on a pullback to this zone (around 950-970) with confirmation of support (e.g., a bullish candlestick pattern like a hammer or engulfing candle). Alternatively, aggressive traders can enter on a breakout retest above 950 with strong volume.
[2] Target 1 (1,049) :
This is the first swing target. If the price reaches this level, consider booking partial profits (e.g., 50% of your position) to lock in gains, as this level may act as resistance.
[3] Target 2 (1,258-1,296) :
If the momentum continues, aim for the second swing target. This is a significant resistance zone, so expect potential profit-taking or a reversal here. Be ready to exit the remaining position if signs of weakness appear (e.g., bearish divergence on RSI or a shooting star candlestick).
[4] Stop Loss :
Set a stop loss on a daily close below 900, as indicated on the chart. This ensures you’re protected if the price breaks down and the setup fails.
** Risk Management Tips for Options Trading
Since this is a swing trading setup, options can be a great way to leverage the move while managing risk. Here are some tips:
[1] Choose the Right Strike :
If you’re buying a call option, select a strike price near the current price (e.g., 950 or 1000 strike) to balance cost and potential returns. Avoid deep out-of-the-money (OTM) options, as they have a lower probability of success.
[2] Position Sizing :
Never risk more than 1-2% of your trading capital on a single trade. For example, if your account size is ₹5,00,000, your maximum risk should be ₹5,000-10,000. Calculate your position size based on the difference between your entry and stop loss.
[3] Time Decay (Theta) :
Options lose value as expiration approaches. Choose an expiration date that gives the trade enough time to play out—preferably 30-45 days out for a swing trade like this.
[4] Use Stop Losses :
Even with options, set a mental stop loss based on the underlying stock price (e.g., a daily close below 900). If the trade goes against you, exit the option position to avoid further losses.
[5] Avoid Over-Leveraging :
Options can be tempting due to their leverage, but don’t overexpose yourself. Stick to a small position size to manage risk effectively.
** Summary and Conclusion
To recap, BRIGADE is showing a promising swing trading setup after completing a corrective wave and breaking out above the 937-972 support zone. The price is targeting 1,049 in the short term, with a potential move to 1,258-1,296 if the bullish momentum continues. A stop loss on a daily close below 900 ensures risk is managed. For options traders, focus on proper strike selection, position sizing, and time decay to maximize returns while minimizing risk.
This setup offers a good risk-reward ratio, but always trade with discipline and a clear plan. Happy trading, and may the markets be in your favor!
** Disclaimer
I am not a SEBI-registered analyst, and this analysis is for educational purposes only. Trading and investing involve risks, and you should consult a financial advisor before making any decisions. Always do your own research and trade at your own risk.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.