Jio Financial Services Ltd (JIOFIN) - Technical Analysis

7 сент.

Jio Financial Services Ltd (JIOFIN) - Descending Triangle Breakout Imminent?Stock Overview:Jio Financial Services Ltd has been consolidating in a descending triangle formation, a commonly recognized bearish continuation pattern. However, a breakout to either side may present significant trading opportunities. Let’s break down the technical aspects and potential trade setups.Technical Analysis:1. Daily Timeframe (1D Chart):Pattern: The stock has formed a descending triangle, where the horizontal support is between ₹330 - ₹335 and the descending trendline is making lower highs.Support Level: ₹330 - ₹335 has been tested multiple times, indicating a strong support zone.Resistance Level: ₹345 - ₹350 acts as the next resistance zone, with previous price rejection in this range.RSI Indicator: The RSI is currently around 50, which indicates neutral momentum. However, a break above 60 could signal the start of a bullish move.Volume: There has been declining volume during consolidation, which suggests that a big move might be coming soon.2. Hourly Timeframe (1H Chart):Support Zone: ₹330 remains crucial as seen in the daily chart, while ₹340 seems to be a key resistance in the short term.Breakout Potential: A clean breakout above ₹340 - ₹345 could lead to a strong upward move. The price has already broken out of the descending trendline on the hourly chart, indicating potential bullish momentum.Volume Spike: Watch for a significant volume increase to confirm the breakout, which is necessary to ensure strength in the price movement.Trade Setup:Entry Strategy:Aggressive Entry: Enter above ₹340 if the stock holds this level for 1-2 candles on the hourly chart with strong volume confirmation.Conservative Entry: Wait for a breakout and close above ₹345 on the daily chart to enter a more confirmed uptrend.Stop Loss:Below ₹330: Place a stop loss around ₹325 to account for false breakouts or volatility spikes. This is below the key support level of ₹330, which should hold for the bullish scenario to remain intact.Target Levels:Target 1: ₹350 - Immediate resistance based on the breakout.Target 2: ₹360 - This aligns with previous high and resistance levels, offering a realistic next target.Target 3: ₹375 - For those looking to ride the momentum further, this would be the next major resistance point.Risk Management:Position Sizing: Risk only 1-2% of your capital on this trade. To calculate position size, use this simple formula:Risk Amount = (Entry Price - Stop Loss) / Total Capital * 100For example, if you are entering at ₹345 and your stop loss is at ₹330, you're risking ₹15 per share. If you want to risk 2% of your capital, say ₹10,000, then your position size should be:Position Size = Risk Capital / ₹15 = 10,000 / 15 = 666 sharesAlways adjust position size based on your risk tolerance.Risk-Reward Ratio:This setup offers a risk-reward ratio of approximately 1:2 or 1:3, which is ideal for a trade like this:Risk: ₹15 (from ₹345 entry to ₹330 stop loss).Reward: ₹25 (Target 1: ₹350 to ₹375).Conclusion:This potential trade on Jio Financial Services Ltd is promising based on the descending triangle breakout possibility. Key levels to watch are ₹330 as support and ₹345 as resistance. A break above ₹345 with volume could open the door for significant gains with a potential target of ₹375. However, proper risk management is crucial, and setting a stop loss below ₹330 is necessary to avoid large losses.