Potential Reversal and Breakout Retest.Entry Zone: We recommend initiating a BUY position in AIA Engineering Ltd. around the current levels, ideally between ₹3,280 - ₹3,320. This area represents a retest of the recent trendline breakout.
Target 1 (T1): ₹3,400
Target 2 (T2): ₹3,480
Target 3 (T3): ₹3,580 (If momentum sustains above T2)
Stop Loss (SL): ₹3,200 (Strictly on a closing basis)
Trendline Breakout & Retest: The stock recently broke out of a significant descending trendline, indicating a potential end to the corrective phase. The current price action appears to be a successful retest of this broken trendline, which often acts as new support, presenting a lower-risk entry point.
Volume Confirmation: The initial breakout was accompanied by higher volumes, and while the retest phase has lower volumes (typical), sustained buying interest on subsequent upward moves would confirm strength.
RSI Bounce from Support: The Relative Strength Index (RSI) is showing a bounce from the 40-50 zone, indicating that momentum is regaining strength and potentially moving towards the bullish territory.
Positive Structure: The overall chart structure suggests that the stock is attempting to reverse its short-term downtrend and potentially resume its broader upward trajectory.
Favorable Risk-Reward: The current setup offers a reasonable risk-to-reward ratio for a short-term trade, with potential for upside gains outweighing the defined risk.
Key Risk: A close below ₹3,200 would invalidate the bullish retest scenario and could lead to further downside, bringing the previous lows into play. Traders should adhere strictly to the stop-loss.
