Zomato Ltd. - Head and Shoulders Pattern
A potential Head and Shoulders pattern is visible on the daily chart, signaling a possible trend reversal. Here's a detailed breakdown:
Pattern Highlights:
Key Levels:
Neckline Support: ₹238.99. A decisive close below this level could trigger a bearish breakdown.
Resistance: ₹279.60, acting as a strong barrier for bullish momentum.
Indicators:
Potential Scenarios:
Bearish Breakdown: A close below ₹238.99 may open doors to lower levels, with the first target around ₹220.
Bullish Invalidity: A breakout above ₹279.60 could invalidate the pattern, leading to further upside momentum.
Volume Insights:
Pattern Highlights:
- Left Shoulder: Formed in mid-August with resistance near ₹279.60.
- Head: A peak in September crossing ₹279.60 but failing to sustain.
- Right Shoulder: Currently forming, respecting the resistance zone at ₹279.60.
Key Levels:
Neckline Support: ₹238.99. A decisive close below this level could trigger a bearish breakdown.
Resistance: ₹279.60, acting as a strong barrier for bullish momentum.
Indicators:
- RSI (Relative Strength Index): Currently neutral but showing potential weakening momentum.
- Moving Averages: Price hovering near the 50-day EMA, with the 200-day SMA as a key support level.
Potential Scenarios:
Bearish Breakdown: A close below ₹238.99 may open doors to lower levels, with the first target around ₹220.
Bullish Invalidity: A breakout above ₹279.60 could invalidate the pattern, leading to further upside momentum.
Volume Insights:
- Noticeable volume reduction in the right shoulder formation, aligning with the classic characteristics of this pattern.
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