Chart Busters: Top trading set-ups to watch out for Thursday.
The Nifty index has formed a bearish engulfing candlestick pattern on the daily chart. The index has lost nearly 240 points from the days high. The broader market has also witnessed a downward move. The advance-decline ratio was in the favour of decliners. Despite this selective stocks have seen buying interest by market participants.
Here are the top trading set-ups to watch out for Thursday.
Bosch: Since the last 96 weeks, the stock was oscillating in a broader range of Rs 17260-Rs 7850, which resulted in the formation of a symmetrical triangle pattern on the weekly chart. On Wednesday, the stock has given a breakout of a symmetrical triangle pattern. Further, this breakout was supported by a robust volume of more than 11 times of 50-days average volume, indicating strong buying interest by market participants. The 50-days average volume was 56232 while today the stock has registered a total volume of 645475. Currently, the stock is trading above its short and long-term moving averages. The stock's Relative Strength Index (RSI) has reached its highest value in the last 14-weeks, which is bullish. Also, it has managed to close above its prior swing high after almost 16 weeks. The stock is in uptrend and trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 48.91 on a daily chart and 27.57 on a weekly chart. Generally above 25 levels is considered as the strong trend. In both time frames, the stock is meeting the criteria. Hence, we would advise the traders to be with a bullish bias. Going ahead, as per the measure rule of the symmetrical triangle pattern, the first resistance for the stock is placed around Rs 19600, followed by Rs 22260. On the downside, supports are seen around Rs 15870-Rs 15500 levels as it is a confluence of 8-day EMA and today’s low.
Chembond Chemicals: Considering the weekly chart (on logarithmic scale), the stock is oscillating in the rising channel for the last 57 weeks. The stock has formed a strong base near the demand line of the rising channel. The demand line coincides with the 20-week EMA level. On Wednesday, the stock has given a 30-days consolidation breakout on the daily chart and it has marked a fresh all time high. The breakout was confirmed by robust volume. All the major indicators suggest a bullish momentum in the stock. Currently, the stock is displaying a bullish trend as it is trading above its short and long-term moving averages. The weekly RSI (66.38) is just above the bullish zone and surged above the prior swing high. The MACD is above the zero line and signal line on the daily chart. The daily MACD histogram suggests bullish momentum. Going ahead, the level of Rs 245 would act as an important support for the stock in the near-term as per the rule of change in polarity i.e. previous resistance once breached acts as a support level. On the upside, targets are open towards the levels of Rs 300. As long as the stock stays above the level of Rs 245 mark, be with a bullish bias.
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