Chart Busters: Top trading set-ups to watch out for Tuesday
The benchmark index Nifty was traded in a narrow range of 93 points on Monday. The index has closed above the 18300 level and formed a bullish candle. The Nifty Smallcap 100 index has marked a fresh all-time high, while the overall advance/decline ratio is tilted in favour of bulls.
Here are the top trading set-ups to watch out for Tuesday.
Gujarat Ambuja Exports: On Monday, the stock has given downward sloping trendline resistance on the daily chart. This breakout was confirmed by a robust volume of more than 8 times of 50-days average volume, indicating strong buying interest by market participants. The 50-days average volume was 2.45 lakh while on Monday the stock has registered a total volume of 20.80 lakh. Additionally, the stock has formed a sizeable bullish candle on the daily chart.
Currently, the stock is trading above its short and long-term moving averages. The short-term moving averages are edging higher, which indicates bullish momentum. The stock's Relative Strength Index (RSI) has reached its highest value in the last 14-days, which is bullish. Also, it has managed to close above its prior swing high. The MACD stays bullish as it is trading above its zero line and signal line. The trend strength indicator, Average Directional Index (ADX), is at 29.29, which indicates strength. The +DI is much above the -DI which is indicative of the bullish strength in the stock.
Based on the above observations, we expect the stock to continue its upward movement and test levels of Rs 188, followed by Rs 201 in the short term. On the downside, a 20-day EMA will act as strong support for the stock.
Ganesha Ecosphere: On December 31, 2021, the stock has given a downward sloping trendline breakout on the daily chart and thereafter witnessed a nearly 22% upside in just four trading sessions. After registering the high of Rs 623.95, the stock has witnessed a minor throwback. During this throwback phase, the volume was mostly below the 50-day average volume, which suggests its routine decline after a robust move.
The throwback is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 454.95-Rs 623.95) and it coincides with the 13-day EMA level. The stock has formed a strong base near the support zone and resumed its upward journey. This reversal from the support zone is further justified by above 50-days average volume. Interestingly, the 14-period RSI on the daily timeframe is in bullish territory. Furthermore, in the throwback phase, the RSI never breached its 60 mark, which indicates that the stock is in a super bullish range as per RSI range shift rules. The MACD is above the zero line and the signal line, plus the MACD histogram suggests a pickup in bullish momentum.
The technical evidence indicates a strong upside in the coming days. On the upside, the level of Rs 623.95 will act as minor resistance for the stock. While, the 13-day EMA will act as strong support, which is placed at Rs 557.40 level.
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