Two interesting trading setups to watch out for on Monday!

The sharp decline in India VIX during the week indicates that fear is abating

The second week of the month of March turned out to be a marvellous one for the bulls as Nifty snapped its four-week losing streak. On a week-on-week basis, Nifty gained about 2.37 per cent and also, formed a sizeable bullish candle on the weekly chart.  

Technically, the formation of a sizeable bullish candle after a reasonable decline is considered to act as a reversal pattern, subject to confirmation. Moreover, the sharp decline in India VIX during the week indicates that fear is abating. In addition to this, improved market breadth in the last couple of trading sessions hint that the stock-specific action is likely to continue in the upcoming week as well.  

Hence, we have selected two interesting trading setups for the upcoming week and traders can keep a close watch on these stocks.  

So, here are the two stocks: 

1.Atul: The stock of Atul Ltd jumped over 6 per cent on Friday along with robust volumes. Volume for the day was just over 71,000 shares, which is double the 50-day average volume. Moreover, the volume for the day was greater than its 30-day average volume. With this strong upmove on Friday, the stock has reclaimed its important moving averages i.e. 20, 50, and 100-DMA. Moreover, the stock has formed a bullish engulfing candlestick pattern on the weekly chart. Normally, the formation of such a bullish engulfing pattern after a reasonable decline is indicative of a bullish reversal pattern.  

2.RHI Magnesita India: The stock surged 6.21 per cent on Friday and the interesting thing is that it has witnessed an uptrend day. An uptrend day is a day when the price starts the upmove right from the beginning of the trading session and closes almost at the day’s high. Moreover, the stock is trading above its crucial moving average i.e. 20, 50 & 100-DMA and all moving averages are in the desired sequence, which indicates the trend strength of the stock. In addition to this, the stock has formed a triangular-like pattern on the daily chart but it is yet to witness a breakout of this pattern on the daily chart. Hence, watch out for this stock.