Chart Busters: Top trading set-ups to watch for June 10
After four days of decline, the Nifty closed higher on Thursday with a surge in defensive stock.
The Nifty opened with a gap down and recovered smartly by 248 points from the day's low. Finally, it ended with a 0.77% gain, with the support of IT and Pharma stocks. The last hour's Banking stock rally also helped the Nifty to close higher. It formed a bull candle, and a bullish engulfing candle is a signal for an upside move. But, the index is trading below the previous week's low. To avoid the bearish signals, it must close at least above the 16584 or above the 16514.
On Thursday, it opened below the 20DMA and took support. The 200DMA is in a downtrend. At the same time, the positive day did not attract a higher volume. Since May 13, the swings have become very shorter and limited to 3 - 4 days. And consolidation within the big moves. On a 75-minute chart, the MACD has given a buy signal, and the Nifty closed above the moving average ribbon. A move above 16484 will be a short-term positive for Nifty.
The stock declined sharply below the 20DMA. It broke the bearish pennant pattern with a high volume. It is trading below all key moving averages. The MACD is below the zero line and about to move below the signal line, while the -DMI is above the +DMI. The ADX shows a strong bearish trend and the Elder Impulse System has formed strong bearish candles. It is also below the Anchored VWAP support. In short, the stock ended its counter-trend consolidation. A move below Rs 302 is negative, and it can test Rs.280. Maintain a stop loss at Rs.308.
The stock has broken the bearish flag pattern with higher volume. The 20DMA worked as resistance for the past five days and finally decisively closed below. The RSI declined below 40 and entered the bearish zone. The MACD is below the zero line, and the -DMI is above the +DMI and ADX, which is a negative signal. The Elder impulse system has formed a strong bearish bar and is below the Anchored VWAP support. In short, the stock resumed the downtrend. A move below Rs 1038 is negative, and it can test Rs 975 in the short term. Maintain a stop loss at Rs 1063.
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