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

Finally, the Nifty has broken down on unexpected event risks. It once again proved that the price discounts everything. The index broke the counter-trend consolidation with added distribution day.

The Nifty closed at the day low and below the 61.8% retracement level of the prior trend. As the Nifty is trading below 50 and 200DMAs, the number of distribution days increased to eight. With this technical parameter, the Nifty has ended the minor trend and entered into a confirmed downtrend. Currently, the index is trading at a 7-week low and has broken the parallel support. The histogram suggests bearish momentum has increased. The RSI (38.57) entered the bearish zone. Going forward, if the Nifty breaks below the 16604 on a closing basis, it is likely to test levels of 16200 levels within no time. Any pullback will give a fresh selling opportunity as the market enters into a confirmed downtrend.

CEAT: The stock closed below the 20DMA decisively on a high volume and is below the prior parallel support, which worked as resistance earlier. The MACD has given a fresh sell signal, and the RSI declined below the 50 zone. The -DMI is crossing the +DMI just now. It closed on the Anchored VWAP support. The Elder Impulse system also formed the consecutive bearish bars. The TSI indicator has already given a sell signal. In short, the Stock broke the key supports. A move below Rs. 1076 is negative, and it can test Rs 1033. Maintain a stop loss at Rs 1089.

RELIANCE: The stock closed on the 20DMA support and below the five-day low, while the MACD has given a fresh sell signal. High volume indicates the selling pressure in the stock. The directional indicators are at an influx point. A move below 20DMA will lead to the domination of the -DMA and bears. The RSI fell below the prior minor low and showed a negative divergence and the Elder impulse system formed a strong bearish bar. The TSI indicator has given a fresh sell signal. It is also below the 20 Period TEMA. In short, the stock has given a weaker signal. A move below Rs 2680 is negative, and it can test Rs 2592. Maintain a stop loss at Rs 2705.