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

NIFTY Tests 50-DMA; May inch higher towards these points.

On the second day of gains, the NIFTY surged higher on the expected lines as it confirmed the validity of the pattern supports and also confirmed the formation of a potential base for itself. The markets saw a gap-up opening, sustained those gains throughout the day and ended near their high point. A rising window was formed on the candles resulting out of a gap; it may cause to resolve in the direction of the trend if confirmed. NIFTY is set to react to the RBI Monetary Policy on Thursday and will also be impacted by the weekly options expiry.

Here are the top trading set-ups for Thursday

BEML 

BEML has been under some consolidation; the most recent price action has seen the formation of a Symmetrical Triangle. This is a neutral formation even though it tends to resolve in the direction of the trend while acting as a consolidation pattern. Multiple signals have emerged that hint at the initiation of the up move in the price. The MACD has shown a positive crossover; it is bullish and trades above the signal line. RSI marks a new 14-period high; it also shows a mild bullish divergence against the price. If the present pattern resolves on the expected lines, the stock can test 1900 and 1930 levels. Slip below 1820 will negate the formation.

COFORGE

COFORGE has shown signs of a formation of a bottom for itself. After witnessing a sharp corrective move from near 6000 levels, the stock had eventually gone near the 200-DMA which presently stands at 4763. While consolidating in a defined range, it has shown some signs of a potential technical pullback. The stock is inside the lagging quadrant of the RRG; a sharp improvement in the relative momentum is seen which may see it rolling inside the improving quadrant. The RSI has also shown a strong bullish divergence. While the price marked lower lows, the RSI did not do so and marked higher lows which resulted in a bullish divergence. The stock, if stays above 4430 may test 4880 and 5000 levels over the coming days.

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