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

NIFTY Makes a strong attempt to find a base; defending Tuesday’s low is crucial.

On a volatile day of trade, the NIFTY continued to show its corrective intent. It opened on a positive note and soon slipped in the red. The Index then oscillated in a wide 250-point range. On the expected lines, the NIFTY tested the pattern support trend line while it formed a low of 17046.65. A pullback ensued and the NIFTY closed near to its opening levels with a modest gain of 53.15 points. It has formed a long-legged Doji pattern on the candles; its occurrence near the support area marks the importance of the support. NIFTY is setting a stage for a technical pullback; if 17050 is defended, we may see the markets forming a base here and attempting a technical pullback from current levels.

Here are the top trading set-ups to watch for Wednesday.

BHARATGEAR 

Over the past quarters, BHARATGEAR has had multiple tops near the 174-180 area; presently the stock has tried to approach this level again. The present pattern on the chart looks buoyant and any move above 178 may result in a fresh breakout in this stock. MACD has shown a positive crossover; it is now bullish and above the signal line. A fresh PSAR buy signal is also seen on the daily chart. On the weekly chart, it remains a continuing buy. The RS line against the broader NIFTY500 index is in a firm uptrend and above the 50-DMA. The stock is likely to test 185-190 levels going ahead; in the process, it would be crucial to keep its head above 170 levels. 

BODALCHEM 

A corrective decline from 150 levels from the month of October saw the stock testing the low in the 102-105 levels in December. Over the previous several weeks, the stock has been in the process of forming a base for itself; it has stayed in a trading range of 105-120 levels during this time. Few signs have emerged that hint at a potential resumption of up move in the stock. Along with a fresh PSAR buy signal, the RS line has also reversed its trajectory. The RS line has not only started to move up but has also crossed above the 50-DMA. The volumes on all up-days have stayed above the 25-day average. The stock has rolled inside the leading quadrant of the RRG, it is set to relatively outperform the broader markets. It holds the potential of testing the 125 and 132 levels over the coming days. Any close below 112 will negate this view. 

Also read: List of Penny Stocks: Penny Stocks Those Were Locked in the Upper Circuit on Wednesday, February 09