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

The benchmark index, Nifty has continued its northward journey as it is closed above the 17800 mark. The index has gained 179.55 points or 1.02% on Tuesday. The price action has formed a bullish candle carrying a higher high and higher low. Most importantly, the Nifty index has closed above 61.8% Fibonacci retracement level of its prior downward move which is started from an all-time high level to the low of 16410.20, which is a bullish sign. The banking benchmark index, Bank Nifty has continued its outperformance for the second consecutive trading session. On Tuesday, the Bank Nifty has surged above its 50-day EMA and 100-day EMA level, which is a bullish sign. 

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

Triveni Engineering & Industries: On the weekly chart, the stock is marking the sequence of higher tops and higher bottoms, which indicates the stock is in an uptrend. Also, it is trading above its short and long-term moving averages. After registering the high of Rs 235, the stock has witnessed minor throwback along with relatively low volume. The throwback is halted near the 50-day EMA level. During the period of the throwback, the stock has formed Ascending triangle-like pattern.

On Tuesday, the stock has given Ascending triangle pattern on the daily chart. This breakout was confirmed by a robust volume of more than 5 times of 50-days average volume, indicating strong buying interest by market participants. Also, this triangle breakout came with a rise in daily range. The last 10-days average daily range average is 7.20 points while on Tuesday, the stock has witnessed 31.30 points range. Further, it has formed a sizeable bullish candle, which adds more bullish sentiments.

Interestingly, the 14-period weekly RSI has formed a base near the 60 zone and started its northward journey. The daily RSI is also in bullish territory. On the weekly chart, the MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram is suggesting a pickup in upside momentum. 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. As per the measure rule of Ascending triangle pattern, the upside target is placed at Rs 268, followed by Rs 284 level. On the downside, the 20-day EMA will act as strong support for the stock.

Atul: After registering the high of Rs 10,969, the stock has witnessed a sharp correction of nearly 26% in just 32 trading sessions. After registering the low of Rs 8,162.60, the stock has slid into the period of consolidation, which resulted in the formation of Ascending Triangle pattern. 

On Tuesday, the stock has given a breakout of Ascending Triangle pattern along with relatively higher volume. Currently, the stock is trading above its short and long-term moving averages. Interestingly, the 20-day EMA and 50-day EMA has started edging higher.

The leading indicator, 14-period daily RSI has surged above the 60 mark for the first time after 52 trading sessions. The RSI is in rising mode and it is trading above its 9-day average, which is a bullish sign. The momentum indicator MACD line has crossed above the signal line, which resulted in the histogram turning positive.

Going ahead, the level of Rs 9,930 will be the first target as per the measure rule of Ascending Triangle pattern followed by Rs 10,200 level.