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

The Nifty almost tested the prior supports, which were once its bases. The price pattern is still within the broadening formation.

If we look at the 75-minute chart, the Nifty is reacting from the counter-trend channels resistance line. The MACD line has serious negative divergence. This gives us some insights into the future trend, while the price action over the last five days has been mischievous. Last week, on Tuesday, it formed an inside bar and a Doji candle. These both got the confirmation of the bearish implications. But, the very next day, a bullish candle gave a reversal signal. Though it opened with a big positive gap, the index registered a failed breakout. Almost all the positions on either hit a stop loss. These kinds of deceiving moves are characteristics of bear market rallies.

On a daily 14-period, RSI has formed a negative divergence. It failed to move above the 55 zone, to strengthen the trend. MACD histogram shows a decline in bullish momentum and the Anchored VWAP acted as a resistance on Friday. The Commodity Channel Index (CCI) has reached an overbought condition and prior swing highs. This indicates the topping signs in the index. As the pattern breakout target met more than 62%, it will be wise to wait for further directional bias. Now the 16720 (Anchored VWAP) and 16870 (50DMA) are the crucial resistances for now. Only above this resistance zone the index will resume the uptrend.

JKCEMENT

The stock closed at the lowest level since February 2021. It registered a very big bearish candle with a massive volume, which indicates serious distribution. It also broke the bearish flag pattern. The pattern also looks like a head and shoulders and is below all key moving averages. The MACD has given a fresh sell signal. RSI is staring at the strong bearish zone, while the -DMI is above the +DMI, and ADX shows a solid strength in the downtrend. The Elder Impulse System has formed a very strong bearish bar and TSI and KST indicators were also given a sell signal, closing below its Anchored VWAP support. In short, the stock broke multiple bearish patterns. A move below Rs 2145 is negative and it can test Rs 1918. Maintain a stop loss at Rs 2200.

VOLTAS  

The stock closed at crucial support of a bearish flag. It reacted from a 38.2% retracement level and closed below the prior day's low. The volume is higher than the previous day. It is near the 20DMA and the moving average ribbon acted as resistance. The Stochastic oscillator has given a sell signal at an extreme overbought level. The RSI is closed at key support of its 9-period average, whereas the Heikin-Ashi candle has formed a reversal candle. The Elder Impulse System has formed a strong bearish bar. In short, the stock is about to break down a bearish flag. A move below Rs 1014 is negative, and it can rest at Rs 974. Maintain a stop loss at Rs 1025.