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

On the monthly expiry day, the Nifty index has gained 121.20 points or 0.70% and price action formed a bullish candle. The Nifty Midcap 100 and Nifty Smallcap 100 has underperformed benchmark indices. The overall advance-decline was tilted in the favour of the advancers.

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

Cerebra Integrated Technologies: Considering the daily chart, the stock has given a downward sloping trendline breakout on November 08, 2021, and after that witnessed nearly 40% upward momentum in just 6 trading sessions. Thereafter, the stock slid into the consolidation, which resulted in the formation of a bullish pennant pattern.

On Thursday, the stock has given a breakout of bullish pennant pattern on the daily chart. The bullish pennant pole height is almost 28 points. Further, this breakout was supported by a robust volume of more than 5 times of 50-days average volume, indicating strong buying interest by market participants. The 50-days average volume was 5.30 lakh while on Thursday the stock has registered a total volume of 29.11 lakh.

As the stock is trading at its all-time high level, all the major indicators suggest a bullish momentum in the stock. The RSI has given positive crossover in the super bullish zone and it is in rising mode. The MACD is above the zero line and the signal line. The MACD histogram suggests bullish momentum and the daily ADX (66.49) is showing an extraordinary strength in the trend. It is much above the +DMI while -DMI is a positive directional sign.

In a nutshell, the stock has registered a bullish pattern breakout along with volume confirmation. On the downside, the 8-day will act as support for the stock in case of any immediate decline.

Cigniti Technologies: Considering the daily chart, the stock is trading in a rising channel for the last 63 trading sessions. On November 22, the stock has taken support near the demand line of the rising channel and started its upward journey. The demand line coincides with the 100-day SMA level. Since the last four trading sessions, the stock is outperforming the benchmark indices. The reversal from the support is confirmed by the relatively higher volumes.

The momentum indicators and oscillators are also supporting the overall bullish picture. The leading indicator, 14-period daily RSI is currently quoting at 50.57 and it is on verge of giving positive crossover. The fast stochastic is also trading above its slow stochastic line, which is a bullish sign.

Considering all the above factors, we believe it is likely to touch the upper trendline of rising channel resistance in the next couple of trading sessions. Currently, the upper trendline resistance is placed at Rs 680 level. On the downside, the 100-day SMA will act as strong support for the stock.