Chart Busters: Top trading set-ups to watch on June 13

The Nifty ended its three-week winning streak and closed at the lowest level after May 26.

With this fall, last week's shooting star candle got the confirmation for bearish implications. It also declined below the 20DMA and ended the counter-trend. After registering a failed breakout on Friday, the Nifty failed to close above the prior day's high. Thursday's surprise rally of 250 points from the day's low was a deceiving move and forced traders to cover the shorts. The current breakdown is exactly meeting the Bearish Flag characteristics, as it was less than three weeks old.

The important thing to understand is that the earlier supports acted as a resistance area last Friday. The index failed to cross the 50DMA resistance too. Both the 50 and 200DMAs are in a clear downtrend. As the Bollinger bands contracted for the last eight days and the index closed below the 20DMA, expect an impulsive move on the downside. The lower Bollinger band is placed at 15832. This level is just below the 38.2% (15892) extension of the Flag pole. As it is already closed below the 23.6% retracement level, expect the above level is the immediate target. The pattern target is actually much lower.

HDFC

The stock closed below the 20DMA and declined sharply with higher volume. The 50 DMA acted as strong resistance during the week. The MACD has given a fresh sell signal on the zero line, while the RSI broke the support and entered a bearish zone. The -DMI is sharply above the +DMI. The Elder Impulse system has formed a bearish candle and TSI indicator has given a fresh sell signal, closing below the Anchored VWAP support and the TEMA. In short, the stock broke the key support. A move below Rs 2180 is negative, and it can test Rs 2110 and Rs 2085. Maintain a stop loss at Rs 2200.

KOTAK BANK 

After oscillating around the 20DMA, the stock decisively closed below it with a big bear candle. It is below the moving average ribbon and also broke the 8-day tight range. The MACD is bearish, and the histogram shows a strong bearish momentum. The RSI broke the 50 support and entered the strong bearish zone., closing below the Anchored VWAP and TEMA. The KST and TSI also gave bearish signals. The Elder impulse system has formed a strong bearish bar. In short, the stock closed below the key supports. A move below Rs 1790 is negative, and it can test Rs 1701. Maintain a stop loss at Rs 1834.