Chart Busters: Top trading set-ups to watch for Thursday
The equity markets had a very controlled and programmed kind of a session as it opened higher; spent the entire day in a limited range and ended with a modest loss of 28.95 points (-0.17%). The markets traded positive for most of the session only to slip in the red towards the end; however, it has still formed a higher top and higher bottom on the daily charts. The NIFTY has resisted the upward rising trend line; this trend line was a support earlier and since it now stands violated, is acting as a resistance. Given the monthly derivatives expiry, the markets may largely stay in a range; keeping the head above 17000 will be crucial to avoid weakness.
ASIANPAINT has taken support at its 200-DMA multiple times over the past couple of months; currently, the stock is seen consolidating while taking support at this DMA which presently stands at 3132. It has shown few technical signs going by which some upward revision of the price cannot be ruled out over the coming days. The RS line against the broader NIFTY500 has turned upwards and it has crossed above the 50-DMA. While the up-days have come with higher than 25-day average volumes, the MACD stays in the continuing buy mode. The decline in crude prices may support the prices as well. If the move happens on the expected lines, the stock may test 3300 and 3325 levels. Any close below 3132 will negate this view.
The stock saw itself marking a high near 6200; after that, the price action resulted in the formation of a lower top at 5830 levels. After that, the stock has stayed under serious corrective pressure. The most recent decline has taken the stock to classical double bottom support in the 3950-4025 zone. Presently, few signals have emerged that hint at a likely reversal of the trend in this stock. A fresh PSAR buy signal has occurred. The stock has also rolled inside the improving quadrant of the RRG when benchmarked against the broader NIFTY500 index. The RSI also shows a strong bullish divergence against the price. If the stock sees a technical pullback, it can test 4370 and 4320 levels on the higher side. Any close below 4040 will negate this view.
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