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

Technically, the Nifty has broken all the key supports last week, as well as, has broken the 61.8% retracement level. On the weekly chart, the Nifty has formed a big bearish candle after November's third week. The probability of recovery and the chances of forming an inverted head and shoulder have been erased. 

On a daily chart, the Nifty has formed a perfect southern Doji candle. On March 07, also it formed a southern Doji and bounced from the oversold conditions. The similarities between these Doji's are formed on a big gap down opening. The previous Doji candle was followed by a bullish engulfing candle, as it opened negatively and closed higher. Currently, there is a probability of bounce, as the Nifty closed below the lower Bollinger band. If a positive closed is no possibility, then a lower closing will lead to a continuation of the current downtrend. 

Even if the bounce occurred on Monday, it might be a short-lived one. Immediate resistance for Nifty is placed in the gap area. The short-covering rise may halt at this level and will attract fresh selling pressure.

In any case, Friday's low is protected for the next three days and forms a big bull candle on a follow-through day, and then, the market status can be changed to Rally Attempt. In this scenario, the Nifty can test the 17060 at maximum.

ITC: The stock closed above the small rounding bottom formation in a counter-trend consolidation. It is trading above the short and long-term moving averages and decisively closed above the 21-period TEMA. The narrowed Bollinger bands indicate an explosive move on the upside is possible. The MACD line is about to move above the signal line, and the histogram is on the zero line. The ADX (25.12) shows a decent strength in the trend, and +DMI is above the -DMI., while the Elder Impulse system has formed a big bull bar. In short, the stock is above the tight consolidation. A move above Rs 267 is positive, and it can test the previous high of Rs 273.15 in the shortest possible time. Maintain a stop loss at Rs 263 and above Rs 273, continue with a trailing stop loss.

TECHM: The stock closed above the eight-day high and above the 8EMA, and the lower Bollinger band flattened. The MACD is about to give a buy signal, while the RSI is out of the squeeze in the oversold zone and above the 40 zone. There is a hidden positive divergence in RSI, whereas the highest volume in a month indicates the buying interest. The +DMI is also rising. The Elder Impulse system has formed two consecutive bullish bars and TSI is about to give a buy signal. In short, the stock is in recovery mode, and a bounce in the benchmark index will lead to a rally in this stock. A move above Rs 1291 is positive, and it can test Rs 1328. Maintain a stop loss at Rs 1283.