Chart Busters: Top trading set-ups to watch for Wednesday
The Nifty has formed a perfect Doji candle and an inside bar. As it failed to make a higher high candle, it indicates that the bulls seem to be tired after filling the May 6 gap.
Though the inside bar does not have any trend change implications as for that to happen it would need a confirmation candle on the next day. Doji candle represents indecisiveness. In any case, if the Nifty closes negative or below 16500, the trend is likely to reverse. As the Doji candle's upper shadow is longer than the lower shadow, the probability of reversal is higher. The Nifty has formed a box in a lower timeframe chart at the top and closed near the support. A close below 16521 would confirm the bearish implications. The MACD indicates a weakness in the trend. The RSI has formed lower lows and lower highs which is an indication of negative bias. The other weaker signal is that the 20DMA is still in the downtrend even after a big surging day.
On the positive side, if the Nifty closes above the 16696, it may test the 16915, which is a 50% retracement level of the prior trend. On Monday, it closed above the 38.2% retracement level, then it failed to sustain above. For now, wait for a decisive trending move to take the position on either side once the low or high of the inside bar is breached.
ACC: The stock has formed a bearish engulfing candle. The 20DMA has been acting as a strong resistance since May 09. It reacted from the mean average and traded in a very tight range. The higher volume indicates a distribution. The MACD line declined below the zero line, and it has been below the signal line since 6th March. The RSI is flattened below the 50 zone, while the Anchored VWAP also acts as resistance, while the KST and the TSI indicators are in the bearish set-up. In short, the stock is trading in a tight range and may break down. A move below Rs 2189 is negative, and it can test Rs 2162. Maintain a stop loss at Rs 2200.
AXIS BANK: The stock closed below the previous day's low and confirmed the bearish implications of the evening star. A huge volume indicates a serious profit booking at higher levels. The RSI failed to sustain above the 50 zone. On a 75 minutes chart, the stock closed at the moving average ribbon support, and the MACD line is a decline from the overbought condition. It faced resistance at Anchored VWAP. The current price pattern looks like a bearish flag. In short, the stock is ending its counter-trend. A move below Rs 683 is negative, and it can test Rs 669. Maintain a stop loss at Rs 689. below Rs 669, continue with a trailing stop loss.
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