INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Market may be looking to break free, but reality is technical indicators do not appear strong enough to take Nifty beyond crucial
10,760-10,870 on higher side.
As such, 69 stocks on NSE could see correction in coming days, as suggested by momentum indicator moving
average convergence divergence, or MACD.
The technical indicator has signalled a downward crossover -- a sign of bearish signal -- on these
counters, hinting at possible downsides
Many of these stocks have also been witnessing strong trading volumes of late, adding credibility to emerging trend
The list includes banking stocks Bank of Baroda and Syndicate Bank, NBFCs Ujjivan Financial and PTC India Financial, aluminium maker Nalco
and paint major Asian Paints.
Sun TV Network, ICICI Lombard, Suven Life Sciences and JSW Energy are a few other stocks that look vulnerable
on technical charts.
MACD -- difference between 26-day and 12-day exponential moving averages -- is known for signalling trend reversals in
traded securities or indices
A nine-day exponential moving average called signal line is plotted on top of MACD to reflect 'buy' or 's ell' opportunities
When MACD crosses above signal line, it throws up a bullish signal, indicating that price of security may see an upward movement and vice
versa.
Meanwhile, 28 stocks showed bearish crossover on daily charts, which include Jet Airways, JK Bank, Fineotex Chemical, SRF, Hikal,
GHCL, Zee Learn and Mukta Arts.
The MACD indicator should not be seen in isolation as it may not be sufficient to take a trading call, just
way a fundamental analyst cannot give a 'buy' or 's ell' call using a single valuation ratio
Traders should make use of other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns
and Stochastic to confirm an emerging trend, say analysts.
Nifty50 traders, meanwhile, are advised to be patient and wait for a decisive
Going ahead, this remains to be a key support on a closing basis, followed by 10,692 and 10,628
We are closer to moment (breakout) and probably in a day or two, things will get clear
decline ratio completely favoured bears, traders will be better-off to adopt a neutral stance till indices register a directional move, said
Mazhar Mohammad of Chartviewindia.in.
Understanding MACDA close look at stock chart of Bank of Baroda shows whenever MACD line has breached
below signal line, stock tended to show a downward momentum and vice versa
On Tuesday, scrip traded 0.50 per cent higher at Rs 121.60.
