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

The Nifty has formed parallel bottoms and a doji candle. This southern Doji candle does not have any trend change implications unless it gets a confirmation. After a volatile session, the index closed in positive territory. Monday's move cannot be considered a pullback effort as it has not moved above the prior day's high. In fact, it declines just below the previous day low. The indecisiveness about the direction needs clear confirmation. Tuesday's close could be decisive. A positive close give more chances for a reversal to the upside, but a negative close or a close below the 15735 would mean resumption of the downtrend. The momentum is flat even on the hourly chart. Only a close above the prior day's high will give a clear signal of the reversal of a trend. The LIC listing may have a larger impact on the markets. The biggest IPO listing will be definitely a big sentiment factor for the market.

POLYCAB: The stock closed above the 20 and 50DMAs for the second consecutive day. The stock consolidates for a long period within the specified range. It has not formed a lower low. The current price pattern looks like a scoop pattern. The MACD has given a fresh buy signal. And the RSI is near the strong bullish zone. The Elder impulse system has formed two consecutive strong bullish bars. The True strength indicator has given a fresh buy signal. It is above The Anchored VWAP and the TEMA. In short, the stock is in a bullish formation. A move above Rs. 2575 is positive, and it can test Rs. 2750. Maintain a stop loss at Rs.2517.

ASIANPAINT: The stock closed at the near parallel support and below all key moving averages. Both 20 and 50 DMA are in a downtrend. The MACD declined below the zero line. The RSI is at the key support. The -DMI is above the +DMI and ADX. The Elder impulse system has formed a strong bearish bar. The stock is also below the TEMA and Anchored VWAP support. The TSI and KST also have given the sell signals. In short, the stock has formed a lower high and closed at the support. A move below Rs.2975 is negative, and it can test Rs.2850. Maintain a stop loss at Rs.3010.