Falling Trendline Breakdown with Early Reversal Signals – Momentum Building Up

The chart of Som Distilleries & Breweries Ltd reflects a classic downtrend structure now showing early signs of reversal after a decisive breakout. From an Elliott Wave perspective, the stock appears to have completed a prolonged corrective phase, likely forming a Wave C of a larger ABC correction. The recent sharp bounce from the lows suggests the beginning of a fresh impulsive Wave 1, indicating a potential trend reversal rather than just a pullback. The most important technical development is the clean breakout above the falling trendline, which had been acting as dynamic resistance for months. Such breakouts, especially after extended declines, often signal a shift in market structure from bearish to bullish. Looking at momentum, there is a strong probability of a bullish MACD divergence at the bottom. While price was making lower lows, momentum likely weakened on the downside, hinting at seller exhaustion. The current expansion candle supports this shift in momentum. From an AVWAP standpoint, anchoring from the recent major swing high or the breakdown zone would show price now reclaiming key average levels. This reclaim is critical, as AVWAP often acts as institutional positioning zones. Sustaining above it strengthens the bullish case. On the fundamental side, the company operates in a steadily growing sector with improving demand dynamics. If supported by: Stable revenue growth Improving operating margins Efficient capital utilization (ROCE expansion) then this technical breakout gains stronger conviction as it aligns with improving business performance. Conclusion: The stock is transitioning from a downtrend to an early-stage uptrend. Sustaining above the breakout zone can trigger a momentum move toward higher levels, with the next leg likely driven by fresh participation and short covering.