LTF Breaking Out of Consolidation and ascending triangle

6月5日

LTF : Breaking Out of Consolidation and ascending triangle with heavy volumes today - Is This the Next Big NBFC Move?

Price Action Analysis:

• Base Formation: Clear sideways movement between ₹160-172 levels
• Breakout Confirmation: Recent breach above ₹172 resistance with volume expansion
• Trendline Break: White descending trendline from December highs decisively broken
• Market Structure: Shift from the consolidation phase to the potential trend resumption
• Time Frame: A six-month base provides a strong foundation for sustained movement

Volume Analysis:

• Current Volume: 5.57M against 20-day average of 15.94M
• Volume Pattern: Accumulation visible during the base formation period
• Support Tests: Volume spikes coinciding with successful ₹160-164 support tests
• Breakout Volume: Adequate but not exceptional - requires monitoring for follow-through
• Distribution Signs: No significant selling pressure visible during consolidation

Key Support & Resistance Levels:

Support Levels:
• Immediate Support: ₹172 (new floor post-breakout)
• Secondary Support: ₹168 (previous resistance turned support)
• Major Support: ₹160-164 (primary consolidation base)
• Critical Support: ₹155 (breakdown level)

Resistance Levels:
• Immediate Resistance: ₹190-195 (measured move target)
• Next Resistance: ₹205-210 (psychological and technical zone)
• Long-term Target: ₹220-225 (extension target)

Trade Setup:

Entry Strategy:
• Aggressive Entry: Current levels ₹183-184 for momentum traders
• Conservative Entry: ₹175-177 on pullback to breakout zone
• DCA Approach: Scale in between ₹175-185 levels

Exit Strategy:
• Target 1: ₹192 (measured move from rectangle pattern)
• Target 2: ₹205-210 (next significant resistance)
• Target 3: ₹220+ (extension target for long-term holders)

Stop Loss:
• Closing Basis: Below ₹170
• Intraday Basis: Below ₹168
• Risk Percentage: 7-8% from current levels

Position Sizing & Risk Management:

Position Sizing:
• Conservative: 1% portfolio risk
• Moderate: 1.5% portfolio risk
• Aggressive: 2% portfolio risk (maximum recommended)

Risk Management:
• Stop Loss Discipline: Strict adherence to ₹170 closing stop
• Position Scaling: Reduce position if breaks ₹175 intraday
• Profit Booking: Book 30% at ₹192, 40% at ₹205
• Trailing Stop: Implement above ₹195 levels

Sectoral Backdrop:

NBFC Sector Positives:
• Credit Growth: NBFC credit growth outpacing bank credit
• Market Share: Gaining share in retail and SME segments
• Asset Quality: Improving collection efficiency post-COVID
• Regulatory Support: Favourable policy environment

Sector Trends:
• Digital Lending: Increased adoption of technology platforms
• Rural Focus: Growing emphasis on semi-urban and rural markets
• Partnership Models: Collaborations with fintech companies

Fundamental Backdrop:

Company Strengths:
• Group Support: Strong L&T Group parentage and backing
• Diversified Portfolio: Exposure across infrastructure and retail segments
• Quality Borrowers: Access to L&T Group ecosystem clients
• Management Quality: Experienced leadership team

Recent Developments:
• Asset Quality: Improving NPA ratios
• Profitability: Better margins and ROE metrics
• Growth Strategy: Focus on profitable growth segments

Risk Factors:

Technical Risks:
• False Breakout: Possibility of returning to the consolidation range
• Volume Confirmation: Need for sustained volume support
• Market Correlation: High beta to financial sector performance

Fundamental Risks:
• Interest Rate Risk: Rising rates impacting lending margins
• Credit Quality: Potential stress in the retail lending portfolio
• Economic Slowdown: Impact on borrower repayment capacity
• Regulatory Changes: Policy shifts affecting NBFC operations

Market Risks:
• Sector Rotation: Money moving away from financial stocks
• Liquidity Concerns: Tightening of wholesale funding markets
• Competition: Increased competition from banks and fintech

My Take:
The technical setup suggests accumulation phase completion with potential for a significant move higher. Follow the Strict Trade Plan as Explained Above.

Keep in the Watchlist.
NO RECO. For Buy/Sell.

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Disclaimer: "I am not a SEBI REGISTERED RESEARCH ANALYST AND INVESTMENT ADVISER."
This analysis is intended solely for informational and educational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.

6月7日

交易進行

Aggressive Entry: Current levels ₹183-184 for momentum traders, Active.
Target 1: ₹192 (measured move from rectangle pattern) Done.

6月24日

註釋

Trailing Stop: Implement above ₹195 levels

前天

註釋

Target 2: ₹205-210 (next significant resistance) Done