Chart Busters: Top trading set-ups to watch out on Friday

The benchmark index, Nifty lost 143.60 points or 0.80% during today's trading session. However, from the days' low, the index has recovered almost 75 points. The price action has formed a bearish candle with a lower shadow. The market breadth is negative as 1207 declines and only 787 advances.

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

Carborundum Universal:  The stock has formed a spinning top candlestick pattern as of September 14, 2021, and thereafter witnessed correction. The correction is halted near the 50-day EMA level. The stock has formed a strong base near the 50-day EMA level and initiated its northward journey.

On Thursday, the stock has given downward sloping trendline breakout on the daily chart along with relatively higher volume. With this trendline breakout, the ADX, which shows the strength of the trend, turned upside and +DI surged above ADX. Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory. The relative strength index (RSI), which is a momentum indicator surged above the 60 mark and is in rising mode. The momentum indicator MACD line has crossed above the signal line, which resulted in the histogram turning positive.

Considering the robust technical structure of the stock we believe it is likely to touch new highs. On the upside, the prior swing high of Rs 951.95 will act as resistance for the stock. While on the downside, the 20-day EMA will act as strong support for the stock.

Parag Milk Foods: Considering the daily chart, the stock has given a horizontal trendline breakout. This breakout was confirmed by above 50-days average volume. Additionally, the stock has formed an opening bullish marubozu candlestick pattern on breakout day, which indicates extreme bullishness.

Currently, the stock is meeting Daryl Guppy’s multiple moving averages set up rules as it is trading above both the short and long term moving averages. The daily RSI is in bullish territory and it is in rising mode. On the weekly chart, the RSI is surged above the 60 mark and above its prior swing high. The MACD line just crossed the signal line, and the histogram became green. Moreover, Martin Pring’s long term KST set-up has also given a buy signal.

Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the upside, the prior 52-week high of Rs 157.80, will act as minor resistance. The 8-day EMA will act as strong support for the stock.