TATACOMM: Ascending Channel Breakdown & Critical Support LevelsPattern Identified:
The stock is trading within an ascending channel (parallel trendlines) that has been in formation since early 2021. Recently, it appears to be approaching the l ower support of the channel , signaling potential risks of a breakdown if selling pressure continues.
Key Technical Observations:
Channel Breakdown Threat: The price has been trending within an upward-sloping channel. However, it recently fell sharply from the upper boundary of the channel and is now testing the lower boundary. A confirmed breakdown below the lower trendline could trigger a further downtrend.
Critical Support Levels:
The ₹1,783 level has held strong as an immediate support zone. If broken, the next support lies at ₹1,693 , a significant historical level from previous price action.
A break below ₹1,693 could lead to a deeper correction, potentially targeting the ₹1,500-1,400 zone.
Resistance Levels: If the stock manages to bounce, it will face overhead resistance at:
₹1,873 (previous resistance)
₹2,000 (psychological barrier)
₹2,200 (channel top)
Moving Averages:
The stock is currently hovering near its 20-week EMA , which aligns with the lower channel support.
It is also far above its 200-week EMA , indicating long-term uptrend strength, though the current pullback should be monitored closely.
Volume and RSI:
Volume spiked during recent sell-offs, suggesting a significant distribution phase.
The RSI (Relative Strength Index) is nearing oversold territory, which might lead to a short-term bounce. However, a lower RSI could indicate bearish momentum persisting.
Outlook:
A channel breakdown may indicate a trend reversal, with the possibility of a deeper correction towards ₹1,500 if key support levels don’t hold.
Traders should watch for a confirmed breakdown or a bounce off the lower channel to time potential trades.
Conclusion: The stock is at a pivotal point, testing the lower boundary of its ascending channel. A decisive move below the ₹1,783 support could accelerate the downside, whereas a successful defense might offer a good risk-reward for a bounce. Investors should closely monitor price action and volume for signs of confirmation.
