Trading Setups For the Coming Week
Sharing Trading setups with Detailed Charts in both Cash & Derivative markets for the following week. Analysis strictly for educational purposes only. Please read the disclaimer at the end.
Good Morning Traders!
Time for caution? As mentioned in the previous newsletter, Nifty index closed right at it’s 20-Week MA last week, and now has formed an indecisive red candle this week, failing to close above it. This suggests a halt in the recent rallying which has taken place.
Overall the structure remains bearish with a Higher Low-Lower Low price pattern. Any follow-through selling may lead to another trip towards previous lows, so watch out!
Nevertheless, there were select pockets across the broader market such as carbon stocks as well as IT stocks which showed some strength throughout the week. In this edition, I have inculcated both short & long trades, with a few breakouts & pullbacks in the mix. Read on to find out what they are!
FnO Space
I have provided only a single setup in this section, reason being I didn’t find any other favourable risk-reward trade! A setup showing considerable weakness & suggests more to come. Here it is below -
HDFC LIFE MARCH FUTURES (CMP - 521.5)
This counter broke down from a crucial support level this week, gave a pullback and has now given a bearish candle again. What’s more, strikes of 530 & 550 have the highest Call OI, which coincides with the level from where it broke down. Price action wise, it has formed what looks like a bearish pennant. Chart below!
TRADE SETUP - PULLBACK after BREAKDOWN
My View - Bearish
Breakout Trades
These stocks have showed immense buying activity, breaking above crucial resistance zones or patterns! Some also heading into blue-sky zone, i.e. All-Time-High territory! Seeing the volume activity, these look very bullish and poised for further strong upward runs.
TATA ELXSI (CMP - 8438.20)
A stock closing at it’s highest ever level, this one has given a breakout above a 3-Month resistance zone with extremely heavy volumes. Any pullback will provide the best entry with minimal risk. Faced resistance 3 times at that level, now has finally taken it out! See chart for details.
TRADE SETUP - BREAKOUT
My View - Strongly Bullish
DELTA CORP (CMP - 320.15)
This stock has broken out from a 6-Month Consolidation, indicating immense strength. Volumes were highest in this period as well. Faced resistance at the level 4 times during the Low-Volume consolidation, and has finally broken above it. Strong Breakout, especially it occuring on the weekly time-frame. See the chart below!
TRADE SETUP - BREAKOUT
My View - Strongly Bullish
Breakout Retest Trades
While some stocks as those given above have given breakouts, few have already boarded the train, and are now giving a revisit to their breakout stations! Such setups offer very good risk-reward trades and can be traded with conviction if the chart elements are favourably placed. Here are a few of them given below -
CIPLA LTD (CMP - 1013.5)
Yes this was a part of the Breakout setup before! Too good to miss, hence I have included this again! After a huge breakout, this stock has retraced to the breakout zone, doing so on low and falling volume activity. The chart will speak for itself.
TRADE SETUP - PULLBACK after BREAKOUT
My View - Bullish
POLYPLEX CORP (CMP - 2169.65)
Similar to the one above, this stock has given a pullback near its breakout zone as well. Same volume characteristics as well, with huge volumes on breakout & very low volumes on the pullback. See the chart for the complete picture!
TRADE SETUP - PULLBACK after BREAKOUT
My View - Bullish
GREAVES COTTON (CMP - 184.45)
Another stock which has given a pullback after a good breakout, this one has also formed a bullish flag pattern in the process, hinting at further upward momentum! Volume characteristics tick all boxes as well. Check the chart below to see the pattern and levels.
TRADE SETUP - PULLBACK after BREAKOUT
My View - Bullish
SOUTHERN PETROCHEM (CMP - 69.95)
Another pullback trade, I have attached an extended chart below to show the re-test as well as the bullish flag pattern which has been formed. Huge Volumes on breakout, low activity on the pullback consolidation. Watch this one for further up-move! Will be strong I feel.
TRADE SETUP - PULLBACK after BREAKOUT
My View - Bullish
That’s it from my side for the coming week as far as trade setups are concerned. I will be back again next week with multiple setups as well! Please undertake appropriate risk management while taking every trade. Stay safe, & in markets too!
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Disclaimer - Charts, analysis and trading setups shared above are purely for educational & learning purposes & are not directly or indirectly any form of recommendation or advice. Please consult your financial advisor / carry out your own research before taking action in financial markets. Not SEBI Registered.