Chart Busters: Top trading set-ups to watch out for Friday

The benchmark index, Nifty has continued its downward journey for the third consecutive day. However, the index has taken support at the 13-day EMA level and recovered almost 130 points from the days low. The index has closed at the 18178.10 level with a loss of 88.50 points or 0.48%. The banking benchmark index, Bank Nifty has gained 512 points or 1.30%. From the daily low, the Bank Nifty has recovered almost 602 points and ended above the 40000 mark for the first time. Among the constituents of Bank Nifty, the Kotak Mahindra Bank and RBL Bank were top gainers.

Here are the top trading set-ups to watch out for Friday.  

Kotak Mahindra Bank: After registering the high of Rs 2077.80, the stock has witnessed minor throwback along with low volume. The throwback was halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 1688.90-Rs 2077.80). On Thursday, the stock has given a cup like pattern breakout. The depth of the cup pattern is 7% and its length is 15 trading sessions. Further, this breakout was supported by a robust volume of more than double of 50-days average volume, indicating strong buying interest by market participants. All the moving averages based on trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. The stock is trading above all the 12 short and long term moving averages. The averages are all trending up, and they are in a sequence. Interestingly, the leading indicator, 14-period daily RSI has taken support near the 60 zone, and bounced back sharply. This indicates a super bullish range shift as per the RSI range shift rules. The ADX is reasonably good at 22.15 levels. The +DI is above the -DI and ADX shows strength in the trend. Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. As per the measure rule of the cup pattern, the upside target is placed at Rs 2230 level. While on the downside, the 20-day EMA is likely to provide the cushion in case of any immediate decline. The 20-day EMA is currently placed at the Rs 1997 level.

Jindal Worldwide: Majorly, the stock is displaying a bullish trend as it is marking the sequence of higher tops and higher bottoms on the daily chart. Further, it is trading above its short and long-term moving averages. These averages are edging higher, which is a bullish sign. After registering the high of Rs 121.90, the stock has witnessed minor correction, which is halted near the 20-day EMA level. On Thursday, the stock has given a 9-days consolidation breakout on the daily chart. This breakout was supported by above 50-days average volume. The momentum indicators and oscillators are also suggesting further bullish momentum in the stock. The leading indicator, 14-period daily RSI is in the super bullish zone and it has given bullish crossover on Thursday. The daily MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram is suggesting further bullish momentum. The stock is clearly on uptrend and trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 56.16 on a daily chart and 45.36 on a weekly chart. Generally above 25 levels is considered as a strong trend. In both time frames, the stock is meeting the criteria. Based on the above observations, we expect the stock to continue its upward movement and test levels of Rs 133.60 followed by Rs 140 in the medium term. On the downside, the 13-day EMA is likely to act as strong support for the stock.