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

On Friday, the benchmark index Nifty has broken the three-day consolidation and witnessed upside. The index gained 0.87 per cent or 150 points. Interestingly, the price action has formed a sizeable bullish candle on the weekly as well as the daily chart, which is a bullish sign. Further, the index has surged above the 20-week EMA level. The leading indicator i.e. the 14-period daily RSI surged above the 50 mark and it is in a rising mode. Nifty Midcap 100 and Nifty SmallCap 100 have outperformed the benchmark indices. The advance-decline ratio was strongly in the favour of advancers.

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

Balaji Amines: The stock has formed a spinning top candlestick pattern as of September 15, 2021, and thereafter, witnessed a sharp correction of nearly 45 per cent. The correction is halted near the 50-day EMA level. For the last eight weeks, the stock is oscillating near the support, which resulted in the formation of a symmetrical triangle pattern on the daily chart.

On Friday, the stock has given a breakout of symmetrical triangle pattern breakout on the daily chart. This breakout was confirmed by robust volume. In addition, the stock has formed a sizeable bullish candle on the weekly as well as the daily chart, which indicates bullishness. Further, along with this breakout, the stock has surged above its 20-day EMA, 50-day EMA, and 100-day EMA levels. The 50-day EMA and 100-day EMA has started edging higher.

The leading indicator i.e. the 14-period daily RSI is about to cross the 60 mark and is in a rising mode. The daily MACD stays bullish as it is trading above its zero line and signal line. On the daily timeframe, the ADX is 13.22 and suggests that the trend is yet to be developed. Directional indicators continue in the ‘buy’ mode as +DI continues above –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. As per the measure rule of the symmetrical triangle pattern, the upside target is placed at Rs 3,750, followed by the Rs 3,840 level.

Sanghvi Movers: On Friday, the stock has given a symmetrical triangle pattern breakout on the daily chart. This breakout was supported by a robust volume of over 5 times of 50-day average volume. This indicates strong buying interest by the market participants. The 50-day average volume was 1.63 lakh while on Friday, the stock registered a total volume of 9.05 lakh. Additionally, the stock has formed an opening bullish Marubozu candlestick pattern on the breakout day, which indicates extreme bullishness.

Currently, the stock is trading above its short and long-term moving averages. These averages are in the desired sequence and they are in the rising mode, which indicates that the trend is strong. Interestingly, the daily RSI has also given a falling channel breakout, which is a bullish sign. The weekly RSI has also given a bullish crossover. The stochastic has also given a bullish crossover on the daily chart. Pring's KST has given a fresh buy signal on the weekly chart.

In a nutshell, the stock has registered a bullish pattern breakout along with volume confirmation. On the upside, the stock is likely to touch the level of Rs 275, followed by the Rs 282 level. On the downside, the 20-day EMA will act as strong support for the stock.