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Nikita (SEBI RA)

21st Oct Β· SEBI-Registered Analyst

Bull Trap – The False Breakout Danger βš οΈπŸ‚

πŸ“Š A Bull Trap happens when prices appear to break out above a key resistance level, luring buyers in β€” only to reverse sharply lower. βœ… Key Signs: Strong green breakout candle above resistance. Sudden rejection next session with red candle closing below breakout level. Volume spike on breakout day, followed by immediate selling. βœ… Meaning: Smart money exits while retailers buy. Result β†’ trapped buyers and a quick down-move. πŸ“Œ Example: Stock breaks β‚Ή980 resistance and hits β‚Ή1,010, next candle opens lower and closes β‚Ή970 β†’ Bull Trap β†’ bearish reversal confirmed. 🧠 Tip: Always wait for a confirmed close above resistance for 2–3 sessions before entering.

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