2 Min Read
Entry: ₹292–295 (on breakout)
Stop Loss (Exit): ₹282
Target: ₹320
This chart shows a bullish continuation setup on Oil & Natural Gas Corp (ONGC) after a prior uptrend.
The stock has already moved up strongly from lower levels and is now consolidating near resistance (~290–295 zone). This sideways movement is forming a tight range, which is typically a sign of accumulation before a breakout.
Key Observations:
- The trend is bullish (price is above the moving average and making higher highs & higher lows).
- The blue moving average is acting as dynamic support.
- Price is forming a range-bound consolidation just below resistance — this is often called a flag / base formation.
Trade Setup Explained:
- Entry (~292):
Entry is planned near the breakout zone. This is where price attempts to move above the consolidation range. - Stop Loss (~282):
Placed below the recent support zone and below the moving average. If price falls here, the bullish structure weakens. - Target (~320):
Based on previous resistance levels and expected breakout momentum.
Logic Behind the Trade:
- Buying near resistance in this case is intentional because:
- The stock is not weak, it is compressing before a breakout.
- Breakouts from tight consolidation often give strong momentum moves.
- Risk is controlled with a nearby stop loss, while upside potential is higher → favorable risk-reward.
What to Watch:
- A strong breakout with volume above 295 confirms the trade.
- If price fails to break and drops below 282, it indicates false breakout / weakness.
- Sustained move above 300 can accelerate momentum toward the 320 target.
Summary:
This is a classic breakout trade in an uptrend:
- Trend: Bullish
- Setup: Consolidation near resistance
- Strategy: Buy breakout with defined risk
- Expectation: Momentum expansion toward higher levels
SL Hit
