Diwali gift for all Ready for reversal trend1. Wait for a Clear Breakout
Entry Condition: A strong monthly close above the descending channel, ideally near or above the first target level of 272 INR. This would indicate that the long-term downtrend might be breaking, showing potential for a reversal.
Volume Confirmation: Look for increased volume to confirm buying interest. A breakout with strong volume typically indicates institutional participation, which could drive prices higher.
Target Zones: If a breakout occurs, you could aim for Targets 2 and 3 on the chart (428 and 742 INR, respectively) as mid- to long-term targets.
2. Support-Based Entry with a Stop-Loss
Entry Condition: If the price reaches the lower support area around 153-164 INR and shows signs of consolidation or buying interest (such as bullish candlesticks or volume spikes), it could be an opportunity to buy at a discount.
Stop-Loss: Set a stop-loss just below the support, around 150 INR or slightly lower, to manage risk in case the stock continues to fall.
Profit Targets: You could aim for Target 1 (272 INR) initially, then reassess if it continues upward.
3. Gradual Accumulation (DCA Approach)
Entry Condition: If you believe in the company’s long-term potential but the technicals are still unclear, you could consider dollar-cost averaging (DCA) over time. This approach reduces the risk of buying all at once and allows you to take advantage of lower prices if the stock declines further.
Accumulation Zones: Consider accumulating in the 150-180 INR range, as it offers potential support and a relatively lower-risk entry zone.
Exit Plan: Re-evaluate when it reaches key resistance levels, especially around the 272 INR level, to decide if you want to continue holding or book partial profits.
4. Look for Bullish Reversal Signals
Entry Condition: Watch for reversal patterns like a bullish engulfing candle, double bottom, or RSI divergence around the support area. These signals could indicate a potential upward move.
Volume and Momentum Indicators: Pay attention to indicators like MACD or RSI on the weekly/monthly chart for bullish crossovers, suggesting that momentum could be shifting in favour of buyers.
Important Considerations
Market Sentiment: Given the overall downtrend, be mindful of broader market conditions, especially for the banking sector.
Fundamental Check: Combine this technical approach with a look at Bandhan Bank's recent financial performance, management commentary, and sector trends, as these factors can affect price movement significantly.
Risk Management: Set stop-loss orders and be disciplined about adhering to them to protect your capital, especially in a volatile or uncertain market.
This approach is purely technical, so it's wise to balance it with a thorough understanding of the company's fundamentals and any recent news that might impact its long-term performance.
