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

As expected, the Nifty opened with a big gap down on Monday, but it recovered smartly and closed near the day high.  The fall was limited for the first hour.  On Friday, the global tumble, the sentiments weak at the beginning of the session.  As some of the heavyweight like HDFC twins, the index recovered and filled the opening gap.  BFSI and Metal sector stocks mainly contributed to the recovery.  But, the index and broader market breadth was negative. The Nifty faced resistance at 50DMA.  Interestingly, the gap between 50 DMA and 200DMA increasing shows the bearish strength.  On a closing basis, it closed within the pennant pattern.  Even though it is still in the broader trading range, it closed near to the previous day's low.  Even on the lower timeframe, the histogram is still below the zero line, and the index is below the moving average ribbon.  For now, the Nifty is in a neutral zone; better avoid the aggressive positions.   

ADANIPORTS: After hitting a new high during the last week, the stock is declining sharply.  It took support at 20DMA on Monday and formed a hammer candle.  But the MACD has given a fresh sell signal.  There is a serious negative divergence in the RSI, and it got a confirmation by closing below the prior swing low.  For the seven trading sessions, the volumes are recorded above average.  The -DMI is rising, and the +DMI is declining.  The Elder impulse system has formed two consecutive bearish bars.  It closed below the TEMA.  The KST and TSI also gave a fresh bearish signal.  In short, the stock has given a bearish signal.  A move below Rs.855 is negative, and it can test Rs.820.  Maintain a stop loss at Rs.865.

DIXON: With the steep fall in the last three days, the stock has broken all key supports.  The stock closed below the 20DMA and moving average ribbon.  It took a support at 50DMA.  The MACD has given a fresh sell signal.  The stock also closed below the parallel support.  The RSI is below the prior low.  The +DMI and -DMI are at the same point, and crossover will strengthen the bearish strength.  The Elder impulse system has formed a strong big bearish bar.  It also closed below the Anchored VWAP support.  The KST and TSI indicators also gave bearish signals.  In short, the stock has broken all long and short-term support.  A move below Rs. 3606 is negative, and it can test Rs.3450.  Maintain a stop loss at Rs.3655.