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

The benchmark index Nifty snapped its four-day winning streak on Thursday and ended the session with a loss of 1% or 179 points. However, from the day’s low, the index has gained 90 points which helped it to close above the 17700 mark. The price action has formed a bearish candle with a long lower shadow, which indicates buying pressure at the lower level. Going ahead, the zone of 17945-17655 will be crucial for the index. A decisive breach on either side may result in a trending move.

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

Praj Industries: After registering the high of Rs 407, the stock has witnessed corrective consolidation along with low volume. The consolidation is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 110-Rs 407).

During the consolidation phase, the stock has formed a Symmetrical Triangle pattern on the weekly chart. Currently, it is on verge of giving a Symmetrical Triangle pattern breakout on the weekly chart. This weeks volume is highest after June 2021, which is a sign of accumulation before the actual breakout happen.

Interestingly, the weekly RSI has given neckline breakout of Adam and Adam Double bottom pattern, which is a bullish sign. The daily RSI is in bullish territory. The stock is also trading above its crucial moving averages. On the weekly chart, the MACD line just crossed the signal line, and the histogram became green. Moreover, Martin Pring’s long term KST set-up has also given a buy signal.

Going ahead, in case, the stock sustains and close above the level of Rs 381, it will result in the breakout of the Symmetrical Triangle pattern. In that case, the upside targets will be placed at Rs 465, followed by Rs 500 level in the near term.

MMP Industries: The stock has formed Bullish Belt Hold candlestick pattern as on the weekend of April 23, 2021, and thereafter witnessed over 152% upside in 15-weeks. However, in the first week of August 2021, the stock has formed a Shooting Star candlestick pattern and witnessed throwback. During the throwback phase, the volume activity was below the 50-weeks average volume, which suggest it is just a routine decline after a robust move. The throwback was halted near the 50% Fibonacci retracement level of its prior upward move (Rs 77.60-Rs 196).

During this period of the throwback, the stock has formed a Symmetrical Triangle pattern on the weekly chart and on Thursday, it has given the breakout. This breakout was supported by robust volume. With this, the ADX, which shows the strength of the trend, turned upside and moved above the -DI on the daily chart.

The stock is trading above its short and long-term moving averages. The 20 and 50-day EMA has started edging higher, which is a bullish sign. On the weekly chart, the leading indicator, 14-period RSI has given positive crossover and it has surged above its prior swing high. The stochastic has given bullish crossover and Pring’s KST has also given a fresh buy signal.

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 Symmetrical triangle pattern, the upside target is placed at Rs 190, followed by Rs 205 level.