The ongoing week will decide the fate of many stocks which are facing heavy resistance in their distribution zones.
A possible breakout over these levels will take them to new highs.
The following stocks share some common patterns and similar configurations –
Let us look at Bharti Airtel:
Bharti Airtel stock price has returned into its distribution zone and now faces stiff resistance. The pattern formed on the chart appears to be a Triple Top. The stock price is near its lifetime high.
Bharti Airtel is giving a very good shorting opportunity with proper risk management.
The option contract of BHARTIARTL 29-SEP-2022 CE 750 has an Open Interest around 57,76,000 contracts on 12th September 2022 which has now become an In-The-Money Call Option as the stock is trading around 770. If this is the defensive level of the operators, then the stock price might fall below 750 before the expiry of this month’s contracts. It seems to be very delusional as a Singapore company named Singtel entities recently sold a large stake in this stock and the promotor purchased the stake and now manipulates the stock price even higher.
MFI is 77.97 which indicates that Bharti Airtel is severely overbought.
Another possibility is where the price closes above the distribution zone will create a breakout event which has a high probability which is backed by the good quarterly results given by the company.
Let us look at Cipla:
The price Cipla is in the distribution zone as well as the price is nearing its lifetime high. We can clearly observe a double top pattern being formed.
Operators are notorious for manipulating this stock as they have complete control over the price. A short trade in Cipla is an excellent trade with a proper stop loss and correct risk management.
The option contract of CIPLA 29-SEP-2022 CE 1060 has an Open Interest around 8,75,000 contracts on 12th September 2022 and the price faces heavy resistance over 1060 as the presence of the operator seems clearly visible.
MFI is around 78 which makes this stock highly overbought.
Again, there is a high probability of the stock making a breakout over this zone. Hence proper risk management is necessary while trading.
Let us look at SBIN:
SBIN is struggling for a breakout. We can observe that the price has been fighting for a breakout with multiple attempts. The price faces heavy resistance in the distribution zone. The stock price has hit its lifetime high on 12th September 2022 at around 558 per share.
We can see a triple top pattern with the price rising for the 4th time as SBIN attempts for a breakout.
The option contract of SBIN 29-SEP-2022 CE 550 has an Open Interest of around 77,75,000 contracts on 12th September 2022 with some contracts reducing that shows small signs of short covering.
MFI of SBIN is about 74 which indicates that this stock is highly overbought.
SBIN has a high probability of a breakout as banks are very bullish considering the strong quarterly results. We may look for long trades in SBIN during the event of a breakout.
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