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

The Nifty witnessed a bloodbath on Thursday as Nifty logged a loss of nearly 2% and ended the session below its important psychological mark of 18,000. The price action for the day formed a sizeable bear candle carrying lower high-lower low and closed below the low of October 25th. With Thursday’s sharp fall, Nifty has slipped below the 13-day EMA, 21-day EMA and closed below the 61.8% retracement of the recent up-move from the low of October 01 to an all-time high. The banking benchmark index has tumbled by over 3%. The overall advance-decline was largely tilted in the favour of the decliners. The India VIX has surged by over 6.45%.

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

Asahi India Glass: The stock has formed a Doji candlestick pattern as on the weekend of March 27, 2020, and thereafter marked the sequence of higher tops and higher bottoms. On Thursday, the stock has given a breakout of a downward sloping trendline resistance on the daily chart. Further, on breakout day the volume was expanded by nearly 18 times of 50-days average volume, which indicates important buying interest. The 50-days average volume was 2.18 lakh while today the stock has registered a total volume of 39.29 lakh. In addition, the stock has formed a sizable bullish candle on breakout day, which adds strength to the breakout.

As the stock is near to its 52-week high, it is trading above all the short and long-term moving averages. The stock is meeting the criteria of Mark Minervini’s trend template. The current stock price is above both 150-day (30-weeks) and 200-day (40-weeks) moving average price lines. Moreover, 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence. Also, the 10-weekly moving average is above both 30 and 40-weekly moving averages.

All the major indicators suggest a bullish momentum in the stock. The weekly RSI is in bullish territory and it is in rising mode. Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the upside, the targets are open towards Rs 448, followed by Rs 480 level. While on the downside, the zone of Rs 398-Rs 387 will act as strong support for the stock.

ABB India: On Thursday, the stock has given a 41-days consolidation breakout on the daily chart. This breakout was supported by robust volume. Currently, the stock is trading above its short and long-term moving averages. These averages are in the desired sequence, which suggests the trend is strong. Interestingly, the daily RSI has broken out of inverse head and shoulders, which is a very bullish sign. The weekly RSI is in the super bullish zone and it is in rising mode. The daily MACD stays bullish as it is trading above its zero line and signal line. The histogram is suggesting a pickup in upside momentum. Moreover, the surge in +DI is suggesting that the trend will strengthen further.

Considering all the above factors, we believe the will continue its northward journey. On the upside, the level of Rs 2066 will act as minor resistance for the stock. While on the downside, the 20-day EMA will act as strong support for the stock.