BIL.N Daily ChartThis chart and analysis are not financial advice. Do your own research before trading or investing.
Bullish Signals:
Inverse Head and Shoulders Pattern: The formation of the head at the bottom around LKR 4.0 and the right shoulder around LKR 4.4 confirms a potential bullish reversal. We could see a strong upward move once prices break above the neckline (currently around LKR 5.8 - 6.0).
Volume Confirmation: The breakout towards LKR 6.0 is accompanied by a noticeable increase in volume. This positive sign confirms buying interest, which often leads to further gains.
Moving Averages Support: The price has crossed above key moving averages, which now act as support (yellow, purple, and blue lines). These provide additional bullish momentum and stability as the price heads higher.
Fibonacci Levels: Key resistance levels drawn from the Fibonacci retracement suggest that the price could target LKR 6.4 and LKR 6.8 after breaking through the current resistance around LKR 5.8 - 6.0. This aligns with the upside potential of the inverse head-and-shoulders pattern.
RSI Momentum: The Relative Strength Index (RSI) is currently at 72.87, indicating strong upward momentum. Although approaching overbought territory, this is often common in the early stages of bullish breakouts.
Risks & Considerations:
Neckline Resistance (LKR 5.8 - 6.0): While momentum is building, the zone between LKR 5.8 and 6.0 is a key resistance level. Failure to break above this level convincingly could result in a pullback towards support levels, such as LKR 5.4 or LKR 5.2.
Overbought RSI: The RSI, which is near 73, suggests that the market may be overbought in the short term. A possible cooling-off period could result in sideways movement or a brief correction before the next leg up.
Trendline Resistance: The chart shows multiple trendlines (TL #1, TL #2, TL #3) that could act as resistance on the way up. TL #2 near LKR 6.2 and TL #3 near LKR 6.7 are especially important levels to watch out for. Price action at these levels should be monitored for signs of exhaustion or continuation.
