PSX- Analysis of Fauji Foods LtdTechnical Observations:
Harmonic Pattern:
The chart depicts an ABCD harmonic pattern with the price currently at point C.
Point A: 12.20
Point B: 19.80
Point C: 15.10 (0.618 Fibonacci retracement of AB)
Target D: 23.94 (Fibonacci extension of AB).
Fibonacci Levels:
Key Support Levels: 16.00 (0.5 retracement), 15.10 (0.618 retracement), and 13.83 (0.786 retracement).
Resistance Levels: 18.00 (0.236 retracement) and 21.00 (recent high).
Volume:
Increasing volume at C suggests potential reversal and accumulation near this support level.
RSI:
The RSI shows a recovery from oversold levels, indicating bullish momentum.
Trendline:
Price is respecting an upward trendline from point A, supporting a bullish bias.
Trade Plan
Entry Strategy:
Buy Zone: Enter near the current price of 17.58 or on a pullback to 16.90–16.00 for a better entry.
Target Levels:
Primary Target (TP1): 19.80 (point B and resistance).
Secondary Target (TP2): 21.00 (recent high).
Final Target (TP3): 23.94 (point D, harmonic completion).
Stop-Loss:
Place the stop-loss below 15.00 (0.618 retracement), ideally at 14.50, to account for market volatility.
Risk-Reward Ratio:
Risk: ~3.08 points (17.58 - 14.50).
Exit Strategy:
Partial Profit Booking: Close 50% of the position at TP1 (19.80).
Trailing Stop: Move the stop-loss to breakeven after TP1 is reached.
