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

In the last four trading sessions, the Nifty index has lost 337.95 points or nearly 2%. On the weekly chart, the price action has formed a bearish candle. On Thursday, the Nifty index has given a breakdown of the bearish flag pattern. The flag pole's height is nearly 1000 points. Further, the Nifty index has slipped below its 50-day SMA level for the first time after May 2021. The market breadth was negative as declines outnumbered the advances.

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

Expleo Solutions: The stock has formed a spinning top candlestick pattern in the last week of March 2020, and thereafter marked the sequence of higher tops and higher bottoms. From the low of March 2020, the stock has witnessed an 1129% upside. However, after registering the high of Rs 1384, the stock has witnessed a throwback. During the throwback phase, the volume activity was mostly below the 50-weeks average volume. Hence, it should be viewed as a routine decline after a robust move. The throwback is halted near the 50% retracement level of its prior upward move and it coincides with the 20-week EMA level.

The stock has formed a strong base in the zone of Rs 969.40-980 level and last week it has given a 17-week base breakout. This breakout was confirmed by a relatively higher volume. As the stock is trading at its all-time high, it is trading above its short and long-term moving averages. These averages are in a rising trajectory, which is a bullish sign. On the weekly chart, the RSI has surged above the 70 mark and it is in rising mode. The weekly ADX (49.41) shows solid trend strength. The ADX is above +DI and -DI.

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 downside, the 20-day EMA will act as strong support for the stock, which is currently placed at Rs 1171.20 level.

Shipping Corporation of India: Majorly, the stock is displaying a bullish trend as it is marking the sequence of higher tops and higher bottoms on a higher timeframe, i.e. weekly timeframe. After registering the high of Rs 145.50, the stock has witnessed minor correction along with low volume. The correction is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 93.15-Rs 145.50).

On Thursday, the stock has given downward sloping trendline breakout on the daily chart. The robust volume on breakout day is portraying a bullish picture. One interesting observation on the leading indicator weekly RSI is that in the recent correction which began from the high of Rs 145.50 to a low of Rs 123.60, the RSI reached 60.59 levels and it turned upward exactly from there. As per the RSI range shift rules, if RSI has taken support at 60 it resulted in a range shift of RSI. The weekly MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram is suggesting a pickup in upside momentum.

Based on the above observations, we expect the stock to continue its upward movement. On the downside, the 34-day EMA will act as crucial support for the stock.