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

The Nifty closed below the prior day's low for the second consecutive day. Even a small recovery effort in the late afternoon was used as a selling opportunity.  

Nifty has formed a strong bearish bar in the last three days. A positive opening did not sustain for a long period, and it closed near day's low and near the lower side of the base. The nine days of consolidation have more bearish bias than bullish. Unlike last week, the volatility is on the lower side this week.  

On a 75 minutes chart, the moving average ribbon is entered into a downtrend along, with the MACD below the zero line. The RSI flattened on a daily chart. The previous week's two strong bullish candles have not shown any positive impact on the direction. Opening on a positive note and ending with big losses has become a common phenomenon recently. Moreover, the broader market weakness is the main worry for now.  The Midcap-100 and Smallcap-100 declined sharply on Wednesday with greater selling pressure. These two indices are already reached near the prior swing low.  

Trent 

The stock closed at key support of a counter-trend pattern, a bear flag. It sharply declined today, forming a bearish engulfing candle. The stock is trading below all key short and long-term moving averages and the moving average ribbon is in a downtrend. The stock has broken the long upward channel and retested thrice. The RSI is below 40 and in a bearish zone, while the ADX indicates a strong downtrend strength. The Elder impulse system has formed a strong bearish bar and it is trading below the Anchored VWAP. In short, the stock is about to break the Bear Flag support. A move below Rs 1028 is negative, and it can test Rs 960. Maintain a stop loss at Rs 1050. 

Adani Enterprises 

The stock has broken the long rising trendline support and broke the bearish flag pattern with high volume. The 20 DMA acted as a strong resistance during the flag pattern formation. It has also closed below the 50DMA and moving average ribbon. The MACD line is below the signal line, just hanging on the zero line. The -DMI is above the +DMI, and the directional movement indicators show expanding from an influx point may result in an impulsive move and it is also below the TEMA. The Elder impulse system has formed a strong bearish candle. The KST and TSI are already in the bearish setup. It is also trading below the Anchored VWAP support. In short, the stock broke the bearish pattern by closing below the key support. A move below Rs 2070 is negative, and it can test Rs 1090. Maintain a stop loss at Rs 2100.