Bisalloy Steel Group Limited (ASX: BIS) Technical Analysis Sum-rCurrent Trend and Price Action
Long-Term Trend: The stock has been in a strong uptrend since early 2021, marked by a series of higher highs and higher lows.
Recent Correction: The recent sharp decline from a peak near AUD 4.50 to around AUD 2.69 indicates a significant pullback. This could be a correction after a strong upward move, suggesting a temporary bearish phase within a larger bullish trend.
Moving Averages Analysis
20 EMA (Short-Term): The stock has broken below the 20 EMA, indicating short-term bearish momentum. This suggests the immediate trend may continue downward unless a reversal signal appears.
50 EMA (Medium-Term): Currently at around AUD 3.00, the 50 EMA may act as a near-term resistance if the price tries to recover.
100 and 200 EMAs (Long-Term): These are trending upward and currently positioned around AUD 2.00-2.20. These levels provide strong long-term support and may act as a potential bounce zone if the price continues to decline.
Support and Resistance Levels
Immediate Support: AUD 2.50, where previous consolidation occurred. If the price finds support here, it could present a buying opportunity.
Major Support: AUD 2.00-2.20, near the 100 and 200 EMAs. This range could provide strong support due to its alignment with long-term moving averages.
Resistance: AUD 3.00 (50 EMA) and around AUD 4.00-4.50 (recent peak). These levels will be critical resistance zones if the price begins to recover.
Volume Analysis
The significant volume spike during the recent peak and subsequent decline suggests strong selling pressure, possibly due to profit-taking or adverse market sentiment.
Trading Strategy
Bullish Scenario: Enter a long position if the price stabilizes around the AUD 2.50 support or shows bullish reversal patterns around the AUD 2.00-2.20 range.
Profit Target: First target around AUD 3.00 (50 EMA), with a second target near the recent high at AUD 4.00-4.50.
Stop-Loss: Set a stop-loss just below AUD 1.90 to protect against a breakdown below long-term support.
Bearish Scenario: Consider a short position if the price breaks below AUD 2.50 with strong volume.
Profit Target: Around AUD 2.00-2.20, aligning with the 100 and 200 EMAs.
Stop-Loss: Place a stop-loss above AUD 3.00 to limit losses in case of a rebound.
Bisalloy Steel Group Limited's stock is currently in a corrective phase after a strong uptrend. Key support levels are around AUD 2.50 and AUD 2.00-2.20. Watch for potential bullish reversal signals at these levels, or further downside if they fail to hold. Use appropriate stop-losses to manage risk in either scenario.
