Buy Entry: INR 450
Stop Loss: INR 430
Target Price: INR 530
The risk-to-reward ratio of 1:3 implies that for every unit of risk (INR 20) taken by setting the stop loss at INR 430, there is a potential reward of 3 units (INR 80), with the target price set at INR 530.
Considering the technical analysis and the risk-to-reward ratio of 1:3, let's assess the trade setup:
Based on the analysis provided, I recommend considering a long position in Granules India at around INR 450 per share. It's essential to set a stop loss at INR 430 to manage downside risk and protect capital in case of adverse price movements.
The target price of around INR 530 presents a realistic upside potential based on the technical breakout and market dynamics. This trade is positioned as a shorter-term trade, given the defined target and risk parameters.
Granules India recently experienced a significant breakout above a crucial resistance level, typically observed around INR 440-450. This breakout suggests a shift in market dynamics, indicating increased buying interest and potential bullish sentiment.
The breakout above the resistance level was accompanied by a notable surge in trading volume. Elevated trading volume during a breakout signifies heightened market participation and conviction among investors. It suggests that market participants, including institutional investors and traders, are actively accumulating shares, reinforcing the validity of the upward move.
The combination of the resistance level breakout and the surge in trading volume suggests a bullish momentum in Granules India's stock price