LUPIN : Making or Breaking?1. Key Analysis and Levels
Wave C Completion Zone (₹1946-1982):
The price has reached a potential corrective Wave C termination area, which often acts as a demand zone where buyers re-enter.
This zone is a high-probability reversal region based on Elliott Wave principles.
Stop Loss Level (₹1924):
Positioned below the Wave C correction zone to manage risk in case of further downside.
Protects against potential failure of the demand zone.
First Target Zone (₹2245-2277):
Represents the extended retracement of Wave B and serves as a logical resistance zone for profit booking.
Change of Character (CHoCH):
A CHoCH signal (change from lower lows to higher highs) could confirm the start of a new bullish wave.
2. Trade Setup
A. Long Trade Setup:
Why Long?
The price has reached a critical demand zone (₹1946-1982) with potential for reversal.
The CHoCH zone suggests a possible trend change to bullish.
Entry: Around ₹1980-2000, upon observing bullish price action (e.g., hammer candlestick, engulfing patterns).
Stop Loss: ₹1924, ensuring minimal risk if the correction extends.
Targets:
₹2245-2277: Key resistance zone at the extended retracement of Wave B.
Trailing stops can be used for further upside beyond ₹2277.
B. Short Trade Setup (If Demand Zone Fails):
Why Short?
A strong breakdown below ₹1924 could indicate the demand zone has failed, leading to continuation of the downtrend.
Entry: Below ₹1924 after confirmation of breakdown with volume.
Targets:
₹1850: Immediate support from prior structure.
₹1720-1750: Deeper demand zone.
Stop Loss: ₹1970 to avoid being caught in a false breakdown.
3. Explanation of Analysis
Wave C Completion:
The corrective Wave C often concludes near key Fibonacci retracement levels, aligning with ₹1946-1982 here.
This zone has historical relevance as a demand area.
CHoCH Confirmation:
A breakout and higher high beyond the consolidation range would validate bullish sentiment.
Risk-Reward Dynamics:
Well-defined stop loss and target zones ensure favorable risk-to-reward setups for both long and short trades.
4. Confirmation Signals
For Long Entry:
Price stability and bullish reversal signals (e.g., RSI divergence, bullish engulfing candles) in the ₹1946-1982 zone.
A confirmed breakout above ₹2020 would further validate the trend reversal.
For Short Entry:
A decisive close below ₹1924 with high volume and bearish momentum.
5. Risk Management
Limit risk to 1-2% of your trading capital per trade.
Use scaling techniques to lock partial profits at the first target zone, trailing stop losses for additional gains.
Why This Plan Works
This trading strategy combines Elliott Wave analysis, demand-supply dynamics, and structured price levels to anticipate a potential bullish reversal. It also incorporates a contingency plan for a bearish breakdown, ensuring preparedness for all market scenarios.
