Chart Busters: Top trading set-ups to watch for Monday

The markets had a listless day once again as the headline index NIFTY stayed below the 50-DMA and spent the day oscillating in a capped and defined range. The NIFTY closed on Friday with a nominal loss of 28.30 points (-0.16%).

The index stayed devoid of any directional bias and formed a lower top lower bottom on the charts as it tracked the falling trend line pattern support. The markets are likely to be weighed down by the unclear picture between Russia and Ukraine. It is very much likely that the NIFTY stays in a range on the next trading day as well.

Downsides may be limited, unless we have any serious negative global cues to deal with over the weekend, a runaway up move is also not likely as well.

Here are the top trading set-ups for Monday

ICICIPRULI

The stock has grossly underperformed over the last five months and has seen significant correction after it tested the high of 725. Presently, the stock trades below all key moving averages but also present a good case for a swing trade in form of a technical pullback. The most recent price action has come with a strong bullish divergence of the RSI against the price. While the price made lower lows, the RSI did not and this resulted in a bullish divergence. The stock, despite being in the lagging quadrant of the RRG is showing a strong improvement in the relative momentum against the broader markets. The technical pullback may cause the stock to test 550-565 levels. Any close below 505 will negate this view.

VOLTAS

The stock remains in a prolonged wide-ranged consolidation after testing its peak near 1350 levels. After that, over the past couple of months, the stock is trapped in a rectangle pattern and has remained in a trading range. Presently, it has moved above all key moving averages while making a fresh attempt to move higher. The OBV has marked a new high ahead of the actual price breakout; so has RSI which also shows a bullish divergence against the price. The volumes remain higher than the 25-day average. There is a fresh PSAR buy signal seen on the chart. The stock may test 1275 – 1330 levels. Any close below the 1210 level will negate this view.

Also read: Stocks to Buy Today: February 21 2022 - Hitachi, ICICI Pru, Intellect