Chart Busters: Top trading set-ups to watch out for Wednesday

The benchmark index Nifty has resisted near the 8-day EMA level and witnessed correction. From the day’s high, the index has lost 123 points and ended the session at 17888.95 level with the loss of 40.70 points or 0.23%. The Nifty Midcap 100 and Nifty Smallcap 100 has outperformed the benchmark indices. The Nifty Realty has gained over 3% and Nifty PSU Bank has gained 2.37%. The advance-decline ratio was in the favour of advancers for the second consecutive trading session.

Here are the top trading set-ups to watch out for Wednesday.

Aditya Birla Fashion and Retail: After registering the high of Rs 276.15, the stock has witnessed minor throwback along with low volume. The throwback is halted near the 38.2% Fibonacci retracement level of its prior upward move and it coincides with the 20-day EMA level. On Tuesday, the stock has given cup pattern breakout along with robust volume. The length of the cup with handle pattern was of 13-days and the depth of the pattern was over 12%.

The stock is clearly in an uptrend as it is marking higher tops and higher bottoms. All the moving averages based on trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. Further, now the stock is meeting Mark Minervini’s trend template rules. These two set-ups are giving a clear uptrend picture in the stock.

Momentum indicators and oscillators are also supporting the overall bullish chart structure. The daily RSI is above 70 and it is in rising mode. The trend strength indicator, Average Directional Index (ADX), is above 36, which indicates strength. The +DI is much above the -DI. This structure is indicative of the bullish strength in the stock.

In a nutshell, the stock has registered a bullish pattern breakout along with volume confirmation. On the upside, the target will place at Rs 306 level. On the downside, the 8-day EMA will act as support for the stock, which is currently placed at Rs 266 level.

Orient Electric: Considering the daily chart, the stock has given a breakout of symmetrical pattern. Further, on breakout day the volume was expanded by 7 times of 50-days average volume, which indicates important buying interest. The 50-days average volume was 4.33 lakh while today the stock has registered a total volume of 30.58 lakh. In addition, the stock has formed an opening bullish Marubozu candlestick pattern on breakout day, which indicates extreme bullishness.

Currently, the stock is trading above its short and long-term moving averages. These averages are edging higher. 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 is above the zero line and the signal line. The MACD histogram suggests bullish momentum. And most importantly, the MACD line crossed the prior swing highs.

Based on the above observations, we expect the stock to continue its upward movement and test levels of Rs 417 followed by Rs 430 in the short term.