Chart Busters: Top trading set-ups to watch out for Thursday.
The benchmark index, Nifty has continued its downward journey on Wednesday as well. The index has lost 152 points or 0.83% and it has slipped below the 18300 mark. In the last two trading sessions, the Nifty index has lost nearly 2%. While Nifty Midcap 100 and Nifty Smallcap 100 has lost over 5% in the last two trading sessions. For the second consecutive trading session, the overall advance-decline was largely tilted in the favour of the decliners. The India VIX has surged by over 5%.
Here are the top trading set-ups to watch out for Thursday.
Indian Bank: The stock has given a breakout of Ascending triangle pattern as of October 12, 2021, and thereafter the stock has surged by over 12% in just four trading sessions. After registering the high of Rs 174.80, the stock has witnessed correction from higher levels as selling pressure emerged in the market. On Wednesday, the stock has taken support near the breakout point and recovered almost 6.44% from the day's low. The price action formed a hammer candle on the daily chart. The formation of the hammer pattern happens near the support zone, which indicates further bullish momentum in the stock. Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory, which is a bullish sign. The momentum indicators and oscillators are also supporting the overall bullish structure. The leading indicator, RSI is in bullish territory. The daily MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram is suggesting a pickup in upward momentum. Going ahead, the retesting of the breakout level gives an opportunity to build a fresh long position. On the downside, today's low of Rs 153.55 will act as strong support for the stock. While on the upside, the prior swing high of Rs 174.80 will act as minor resistance for the stock.
Polycab India: On Wednesday, the stock has given a neckline breakdown of Adam and Adam double top pattern. This breakdown was supported by above 50-days average volume. Additionally, the stock has formed three black crows candlestick pattern. The three black crows candlestick pattern is a bearish reversal candlestick pattern. This pattern occurs when bears overtake the bulls during three consecutive trading sessions. Currently, the stock is trading below its 20-day EMA. The 20-day EMA has started edging lower and the rising angle of 50-day EMA is slowed down considerably. Recently, the price has made a parallel high, but most of the indicators, including the RSI, have not reached the prior highs. The CCI has also supported the same phenomenon. This indicates limited upside. The fast stochastic is trading below its slow stochastic line. Technically, all the factors are currently aligned in support of the bears. Hence, we would advise the traders to be with a bearish bias. In case, the stock sustains below its 50-day EMA then it may touch the level of Rs 2229, followed by Rs 2130 level. On the upside, the 20-day EMA will act as crucial resistance for the stock.
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