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

The session on Wednesday turned out to be much better than expected as the NIFTY opened on a positive note, but stayed a bit shaky in the morning trade while maintaining modest gains. It got stronger as the day progressed and went on to close with a robust gain of 331.90 points or 2.07%. In the process, it has formed a strong white candle and this reflected a strong directional consensus on the upside.

The weekly options expiry is likely to influence the trade. If the technical pullback gets extended, the NIFTY may move towards 16500 levels where it is expected to find strong resistance.

ASIANPAINT

The stock had been severely beaten down after a flare-up in crude prices. The weakness in the stock was evident as it had formed a bearish head and shoulders formation on the daily charts. The price violated the trendline, broke down on the downside, and has achieved the classical price targets near 2600 levels. The recent price actions show a formation of a probable base; there are possibilities that the stock sees a technical pullback. The volumes had surged while the stock formed its potential reversal point. The RSI has crossed above 30 from an oversold zone.

If the technical pullback continues its move on the expected lines, the stock can test 3000-3040 levels. Any close below 2800 levels will negate this view.

TATAPOWER

This stock has been one of the most resilient stocks amid these current volatile times. Although it came off its highs, it has largely remained sideways and in a defined trading range. A couple of signs have appeared on the technical charts that hint towards the likely resumption of the up move in the price. A fresh PSAR signal has emerged. The stock which is in the improving quadrant of the RRG is seen moving steadily towards the leading quadrant. The RSI has marked a new 14-period high; it also shows a strong bullish divergence against the price. The RSI is also seen breaking out from a pattern formation. The daily MACD has shown a positive crossover, it is now bullish and above the signal line. 

If the present technical structure resolves on the expected lines, the stock may test 238-245 levels. Any close below 215 will negate this view.

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