Market Analysis and Trading Views on IRB Infra Stock
Becoming a positional trader can be quite satisfying as it offers a balanced approach to managing risk and maximizing potential gains. For instance, considering the IRB Infra stock, we notice a flag pattern forming in the 1-year time frame. This suggests a continuation or breakout of the stock price in the near future. Following this pattern, it appears that the stock could reach around the 130-137 levels by the end of the week, which would present a favorable entry point for a buy order. With a target range set at 165-170, the risk-to-reward ratio is approximately 2:3, assuming the stop loss is placed at around 115.
Timeframe Analysis
Monthly Chart Analysis:
For the IRB Infra stock, the current trend is crucial. As long as it does not close below 110, a trend reversal will likely be confirmed. This suggests a robust and enduring upward trend for this stock. In this scenario, it is essential to monitor the closing prices and ensure they do not break the support level of 110.
Weekly Chart Analysis:
The weekly chart reveals a potential consolidation pattern, with the stock forming a doji, which indicates indecision or a pause in the upward momentum. The stock is expected to revert to the 130-135 level. This pattern suggests that the stock may consolidate in this range before moving further upward or downward, depending on the market dynamics.
Daily Chart Analysis:
On the daily chart, a strong support level is noted at 140. Once the stock crosses this level, a bullish trend is expected to continue. The recent retracement is coming to an end, and the stock is likely to move upward again. Therefore, traders should watch for key resistance levels at 130-135 where the stock is expected to experience some selling pressure.
Market Sentiment and Global Influence
Market sentiment plays a pivotal role in short-term price movements. As the US markets closed in red, indicating a negative sentiment towards the US economy and possibly an anticipated rate hike by the Fed next year, the Asian markets are likely to react differently. However, it is important to note that there is still uncertainty regarding how the Asian markets will perform. The outcome could lead to a positive or negative sentiment affecting the Indian market, particularly NIFTY, which may see a potential decline of up to 250 points if the Dow futures remain in the red on Monday.
Furthermore, the performance of the Dow and NASDAQ indices, which closed in red, suggests a possible correction in the Indian market. To avoid a significant drop in the Indian market, it is crucial for Dow futures to show an increase of at least 300 points. If this doesn't happen, traders should prepare for a potential correction, with NIFTY potentially experiencing a decline of around 250 points.