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

On the expected lines, it was a day of positive consolidation for the markets. The NIFTY50 ended the day with a modest gain of 35.55 points (+0.21%). The markets opened with a gap down but soon crawled inside the positive territory. It spent the rest of the session moving in a sideways trajectory. In the process, the NIFTY formed a white candle as the markets closed higher than they opened.

With the lead indicators remaining neutral and not showing any divergences, the NIFTY may continue remaining in a defined range with the zone of 16900-17000 acting as a stiff resistance.

JSWSTEEL

JSWSTEEL has been trading largely in a defined trajectory and a trading range. It had slipped below all the key moving averages but the most recent price action has seen the stock moving above the 50-, and 100-DMA which are at 649 and 656 respectively. It just trades below the 200-DMA which is currently at 676. The RSI has marked a new 14-period high which is bullish. It has shown a strong bullish divergence against the price; it appears to have broken out from a pattern formation ahead of the actual price breakout. The MACD is in continuing buy mode. The stock has the potential to test 705 – 735 levels. Any close below 625 will negate the view.

GLENMARK 

GLENMARK has been one of the relative underperformers among the pharma group; following the most recent corrective move and testing the low point near 416, it has shown some point of reversal and a potential upward revision in the price. The stock has rolled inside the improving quadrant of the Relative Rotation Graph when benchmarked against the broader NIFTY500 Index. This marks an end to the relative underperformance of the stock. The PSAR has shown a fresh buy signal. The MACD has shown a positive crossover; it is bullish and stays above the signal line. The RSI has marked a new 14-period high; it shows a strong bullish divergence against the price. 

If the potential reversal and a technical pullback happen on the expected lines, the stock may test 475-490 levels. Any close below 435 will negate this view.