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

NIFTY had a buoyant session but with very narrow intraday moves following a gap-up opening. However, despite trading in a defined 100-point range, the headline index ended with gains of 203.15 points. The move has halted near the short-term 20-DMA which is at 17766, and a rising window formation is seen on the candle. Rising windows are formed due to gaps; they usually resolve in the direction of the trend. A confirmation though is required on the next bar. NIFTY Bank and PSU Bank Index outperformed all the others as all sectoral indices ended in the green.

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

Apollo Hospitals: The stock witnessed a corrective decline after it went near the 6000-level. It retraced from the high point of 5935; the correction took the stock to slip briefly below the 200-DMA which presently stands at 4267. The most recent phase of the decline saw a strong bullish divergence of the RSI against the price. While the stock bounced off from the 200-DMA, it put a temporary bottom for itself in place. The daily MACD is bearish but sharply narrowing histogram points at a likely positive crossover. The stock has also shown a fresh Parabolic SAR buy signal on the daily charts. If the present pattern resolves on the expected lines, the stock may test 4830-4950 levels. The view shall stand negated in the event of the price slipping below 4350 levels.

NATCO Pharma Ltd: For the past several weeks, NATCOPHARM has formed a strong base for itself after it stayed in an 805-880 zone which had become a base-forming trading range following a corrective decline from 1200 levels. The most recent price action has seen the PPO turning positive. The stock has also seen a fresh buy signal on the lead indicators; it stays in the leading quadrant of the RRG when benchmarked against the broader NIFTY500 index. While it forms a base for a confirmation of a reversal of trend, it has resistance near 950 and then at 1080 levels. Strong support exists in the 850-878 zone.