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

On Wednesday, the benchmark index Nifty has continued its southward journey for the third consecutive trading session. The Nifty index has lost 0.60% or 103.50 points. The price action has formed a bearish candle and the daily RSI has given bearish crossover. The overall advance-decline was tilted in the favour of the decliners.

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

Maral Overseas: On Wednesday, the stock has given symmetrical triangle pattern breakout on the daily chart. Further, this breakout was supported by a robust volume of nearly 7 times of 50-days average volume. This indicates strong buying interest by market participants. The 50-days average volume was 52,896 while on Wednesday the stock has registered a total volume of 3.69 lakh. On Wednesday, the stock has hit the upper circuit.

As the stock is trading near its all-time high, all the moving averages based on trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. The stock is trading above all the 12 short and long term moving averages. The averages are all trending up, and they are in a sequence. Further, the stock is meeting Mark Minervini's trend template rules. These two set-ups are giving a clear uptrend picture in the stock.

Interestingly, the daily RSI has also given a downward sloping trendline breakout, which is a bullish sign and the weekly RSI has also given a bullish crossover. The MACD is above the zero line and signal line on the daily chart. The MACD histogram suggests bullish momentum and importantly, the MACD histogram crossed the prior swing highs.

In a nutshell, the stock has registered a bullish pattern breakout along with volume confirmation. As per the measure rule of symmetrical triangle pattern the upside target is placed at Rs 110 followed by Rs 122 level.

IFGL Refractories: Considering the daily chart, the stock has given neckline breakdown of Adam and Adam double top pattern as of August 18, 2021, and thereafter the stock has marked the sequence of lower tops and lower bottom. From the high of Rs 439, the stock has corrected over 38% in just 71 trading sessions.

On Wednesday, the stock has given downward sloping trendline breakout on the daily chart. Further, on breakout day, the stock has witnessed the highest volume after August 24, 2021. Along with this breakout, the stock has surged above 50-day EMA and the falling slope of 50-day EMA has slowed down considerably. The 20-day EMA has started edging higher. This is a bullish sign.

The stock's Relative Strength Index (RSI) has reached its highest value in the last 14-days, which is bullish. Also, it has managed to close above the 60 mark after over four months. On the weekly chart, the RSI has given a bullish crossover. On the daily timeframe, ADX is 8.43 and suggests that the trend is yet to be developed. Directional indicators continue in the ‘buy’ mode as +DI continues above –DI.

Based on the above observations, we expect the stock to continue its upward movement and test levels of Rs 330 followed by Rs 342 in the short term. On the downside, the 20-day EMA is likely to provide the cushion in case of any immediate decline.