Chart Busters: Top trading set-ups to watch for Thursday

On a highly volatile day, the Nifty traded over 200 points range yesterday and finally formed a long-legged, small body candle. It formed lower low and lower high candles.

The previous day's doji candle got the bearish confirmation. At the same time, it has also got the downside confirmation for an inside bar. In the last 40 minutes of yesterday's, a sudden sharp recovery has been led by some of the banking stocks. Otherwise, the index breadth was negative. On a 75 minutes chart, it broke the box range on an intra-day basis but closed exactly at the previous day's low. The last two days' price action is not giving any strength to the bulls. As stated yesterday, the price action is looking southwards. Like Wednesday, sharp and sudden rallies may come often. These are all counter-trend within the minor trend. The long-term trend is still looking down.

ICICIPRULI

The stock has broken out of a symmetrical triangle and closed at the prior swing high. The price has also formed an ascending triangle. It closed above the 50DMA and moving average ribbon. It is 7.22% above the 20DMA. The MACD is strongly above the zero line and the signal line, while the RSI is in a strong bullish zone. The +DMI is above the -DMI is a positive sign also it closed above the Anchored VWAP resistance and TEMA decisively. The Elder Impulse System has formed a strong bullish candle, while the KST and TSI have given a bullish signal. In short, the stock has broken out of a triangle. A move above Rs 555 will result in an ascending triangle breakout. The target is placed at Rs 611. Maintain a stop loss at Rs 540.

BAJAJFINSV 

The stock has closed at four day low after two indecisive Doji candles. After declining 30% from the recent top, the stock has been consolidating for the last nine days. By closing lower, it confirmed the bearish implications of the doji candles. The 20DMA acted as a resistance for the last three days. The RSI failed to close above the 40 zone and the MACD line is below the zero line. The Elder Impulse System has formed a strong bearish bar and is below the Anchored VWAP. In short, the stock is going to resume the downtrend. A move below Rs 12535 is negative, and it can test Rs 11900. Maintain a stop loss at Rs 12945.