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

The Nifty closed above the 23.6% retracement level. The index has formed an ascending triangle on a daily chart and a higher high and higher low candle on a weekly chart. This actually gives confidence to bulls.

The Nifty will register an 11-day ascending breakout if it closes above the 16410 with a higher volume. The pattern breakout targets are open to 17073, which is very near to the 61.8 per cent retracement level of 17205. The Index also closed above the 20Day moving average for the first time after April 13.

The RSI is currently at 48; a move above 50 will gives a bullish confirmation to the Index. It came out of the oversold zone during the 11-day consolidation. The MACD line also turns back from the oversold zone and crosses the signal line. Generally, if the price move above the 20 DMA, the +DMI crosses the -DMI. But it has not happened this time. Still needs some more striking positive moves to get the bullish bias. Because the Nifty traded in a narrow range in the consolidation, the ADX has flattened. The Index is coming out of oversold zome and consolidation after a long time. The bounce is common in a counter-trend. Trust the bounce only above the 50DMA or above 61.8% retracement levels. Otherwise, all the counter-trend rallies are continuation patterns. The downtrend will resume once the counter-trend is ended.

MINDTREE

The stock has got the confirmation for the hammer or a southern Doji's bullish implications. It closed above the sloping trendline resistance of the downward channel. The stock tested the 8EMA. For the last two days, the volume has been higher. The RSI came out of a squeeze and confirmed the bullish implications of a divergence. The MACD has given a fresh buy signal. The +DMI has risen and has a bullish divergence. The TST indicator has given a buy signal. In short, the stock begins the counter-trend rally. A move above Rs 2880 is positive, and it can test Rs 3080. Maintain a stop loss at Rs 2800. Above Rs 3080, continue with a trailing stop loss.

INFY 

The stock gets the confirmation of an inside bar's bullish bias. The stock closed above the May 25 high. It closed above the 8EMA. The RSI also gets the confirmation for a bullish divergence. It broke above the squeeze zone. The MACD has given a buy signal after flattened for a period. The stock closed above the TEMA. The TSI and KST indicators have given a buy signal. In short, the stock begins its counter-trend rally. A move above Rs1463 is positive, and it can test Rs1521. Maintain a stop loss at Rs 1450.