Chart Busters: Top trading set-ups to watch out for on Wednesday
On Tuesday, the benchmark index Nifty traded in a narrow range of 130 points and formed a small body bearish candle. The broader market has outperformed the benchmark indices. The advance-decline ratio was in the favour of advancers.
Here are the top trading set-ups to watch out for Wednesday.
Karnataka Bank: The stock has formed a Doji candlestick pattern as of September 16, 2021, and thereafter witnessed correction along with low volume. During the correction, the stock has formed a symmetrical triangle pattern on the daily chart. Currently, the stock is on the verge of giving a symmetrical triangle pattern breakout. Further, on Tuesday the volumes recorded were above the 50-days average, which is a sign of accumulation before the actual breakout happens.
Currently, the stock is trading above its short and long-term moving averages. These averages are in edging higher, which is a bullish sign. Interestingly, the leading indicator, 14-period daily RSI is on the verge of giving a breakout of a falling channel. The fast stochastic is trading above its slow stochastic.
Going ahead, the upper trendline of the symmetrical triangle is placed in the zone of Rs 74.50-Rs 75 levels. In case stock sustains above this zone, then we may see a sharp upside in the stock. On the downside, the 8-day EMA will act as strong support for the stock, which is currently placed at the Rs 71.15 level.
Bharat Electronics: The major trend of the stock is bullish as it is trading above its short and long-term moving averages. These averages are in a rising trajectory, which is a bullish sign. On Tuesday, the stock has given downward sloping trendline resistance breakout on the daily chart. This breakout was confirmed by above 50-days average volume.
The momentum indicators and oscillators are also suggesting bullish momentum. The leading indicator, 14-period daily RSI is currently quoting at 65.18 and it is in rising mode. The RSI is trading above its 9-day average. On the weekly chart, the RSI is in the super bullish zone. The Pring's KST has given a fresh buy signal on the weekly chart. Mansfield Relative Strength is above the zero line and shows outperformance as compared to the Nifty 500 index.
Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the downside, the 8-day EMA will act as strong support for the stock. The 8-day EMA is currently placed at Rs 208.20 level.
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