TATATECH - Inverse H&S Pattern Breakout

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TATATECH - Inverse H&S Pattern Breakout

The chart displays a classic Inverse Head and Shoulders pattern, which is often viewed as a signal of a potential upward trend reversal. This means that after a period of price decline, the stock might be gearing up for a move higher.
The left shoulder, head, and right shoulder are clearly visible, and the price appears to be moving above the neckline, indicating the possibility of a breakout.

Volume Increase:
There's a noticeable rise in trading volume on the right side of the chart, which signals growing interest. A strong volume during a breakout is usually a good sign that the price move has solid backing and could be sustained.

Breakout Momentum:
The stock has already started to break above the neckline, with prices moving upward, suggesting that the momentum is in favor of further gains.

Short-Term Trading Levels:
Here’s how you could approach this setup, considering entry, profit targets, and stop-loss points.

Entry Point:
Since the stock has already broken out from the neckline, it might be a good idea to enter near the current price of around ₹1,114, assuming the breakout continues.

Target Levels:
First Target (T1): ₹1,180 – This is the first potential resistance level where the price might encounter selling pressure, based on previous price behavior.
Second Target (T2): ₹1,224 – The second level to aim for, where the price has previously stabilized or paused.
Third Target (T3): ₹1,270 - ₹1,280 – The final short-term target, close to previous highs on the chart.

Stop-Loss:
To limit potential losses, a stop-loss can be set just under the neckline, around ₹1,060. This level gives some buffer for price fluctuations while protecting from a failed breakout.

Summary:
Entry Point: Around ₹1,114
Targets: ₹1,180, ₹1,224, ₹1,270-₹1,280
Stop-Loss: ₹1,060
Keep an eye on volume and price movement. If the volume stays strong, the breakout is more likely to continue, increasing the chances of hitting the target levels. However, if the price drops back below the neckline, the breakout could be false, and the setup may become invalid.