AUBANK : Trade for Options Trading AU Small Finance Bank (AUBANK)
Liquidity Buildup: The ₹585-588 zone shows institutional buying activity, indicated by tight price ranges and volume consolidation. This zone acts as a demand area, where buying pressure is likely to sustain.
Weaker Supply Zone: Sellers dominate the ₹620-625 range but are weakening. If the price reaches this level again, a breakout is more probable.
Stop Loss Placement: Below ₹579, the demand zone fails, and the trade setup is invalidated.
Trade Plan:
Entry: Buy near ₹588 when the price approaches the demand zone with increasing volume.
Target: Exit around ₹620-625, aligning with historical supply resistance.
Stop Loss: Set at ₹579 to protect against demand failure.
Risk-Reward:
Risk (₹579): ₹9 below entry at ₹588.
Reward (₹625): ₹37 above entry.
R/R Ratio: 1:4 – an ideal setup for swing trades.
Educational Tip: Look for large green candles and volume spikes near the demand zone to confirm institutional interest before entering.