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

The first trading session of the CY2022 was completely dominated by the bulls as the Nifty index opened with an upside gap and continued its northward journey throughout the session. It gained 271.65 points and closed at the 17625.70 level. Most importantly, the banking benchmark index, Bank Nifty has surged above its 200-day SMA level and it has outperformed the headline indices. The Bank Nifty has gained 2.65%. The advance-decline ratio was strongly in the favour of advancers.

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

Minda Corporation: After registering the high of Rs 179.85, the stock has oscillated in a broader range of Rs 179.80-Rs 150.65, which resulted in the formation of a Broadening Formation Right-Angled and Descending pattern. It is a short-term bullish continuation pattern.

On Monday, the stock has given the breakout of broadening formation pattern. Further, this breakout was supported by a robust volume of more than 7 times of 50-days average volume, indicating strong buying interest by market participants. The 50-days average volume was 15.11 lakh while on Monday the stock has registered a total volume of 1.16 crore.

As the stock is trading at its 52-week high, all the trend indicators are showing that the uptrend to continue. The stock is trading above the long term and medium-term trend indicators, i.e. 200 and 50 DMA. Interestingly, on the weekly chart, the 14-period RSI has taken support at 60 levels and bounced sharply, which indicates a super bullish range shift as per the RSI range shift rules. On the daily chart, the MACD line just crossed the signal line, and the histogram became green.

In a nutshell, the stock has registered a bullish pattern breakout along with volume confirmation. Hence, we would advise the traders to be with a bullish bias. On the downside, 13-day EMA will act as strong support for the stock.

Shilpa Medicare: On Monday, the stock has given a breakout of the falling channel on the daily chart. This breakout was accompanied by a robust volume. Further, on Monday, the stock has surged above its 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA levels. Interestingly, the short-term moving averages have started edging higher, which 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 almost three months. The stochastic has also given bullish crossover. On the daily timeframe, ADX is 8.58 which 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 613 followed by Rs 658 in the short term. On the downside, the 20-day EMA will act as strong support for the stock.