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

The Nifty has formed a bear candle on the weekly chart. With this, the previous week's Doji candle got the confirmation of its bearish implications. As it formed, most bearish candles, with very tiny shadows, it is a bad omen for the market and 18114 is an intermediate swing high.  

The engulfing candle on Wednesday on the 20DMA support is another weaker signal for the market. The 50 DMA and the 200DMAs have been parallel moving together for the past five days. By declining more than the 23.6% retracement level of the prior upswing, the Nifty also confirmed the downswing. The Nifty is currently holding two distribution days. Comparatively, the volumes declined below average for the last one month, except for two three days, and continue to decelerate. Any addition of distribution days and decline below 17165 will drag the market towards another swing low. In many ways, the 17400 support is crucial for the market now. Currently, the 50DMA (17165) is 1.75% away.  

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

Eicher Motors: The stock closed at an important support level of a counter-trend rally. It failed to close above the 61.8% retracement level of the prior decline. It closed below the 50DMA, and the 20 DMA support is placed at Rs 2458. The 50 DMA is in a downtrend. There have been a series of bearish and indecisive candles for the past six days. The momentum is clearly waning, and the RSI was staring at the below 50 zones. The Elder impulse system has formed a bearish candle. It is trading 4.88% below the 200DMA. It closed below the Anchored VWAP resistance. On a 75-minute chart, it closed below the moving average ribbon and the MACD line below the zero line, which is bearish. In short, the stock closed at crucial support. A move below Rs 2480 is negative, and it can test Rs 2330. Maintain a stop loss at Rs 2510. 

Maruti Suzuki India: After oscillating for three days, the stock decisively closed 2.10% below the 20DMA. The narrowed Bollinger Bands indicates an impulsive on the downside. It is also trading below the key moving averages and by 5.92% below its 50DMA and 0.91% below its 200DMA. It has also slipped below the moving average ribbon. The MACD is about to give a sell signal below the zero line. TSI has already given a sell signal. The Elder impulse system has formed four consecutive bearish signals. The RSI is very near to the bearish zone. In short, the stock is ending its counter-trend consolidation. A move below Rs 7460 is negative, and it can test Rs 7380. Maintain a stop loss at Rs 7530.   

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