INSUBCONTINENT EXCLUSIVE:
setback in Karnataka marred investors' risk appetite.
The SP BSE Sensex slipped 232 points, or 0.67 per cent, to close at 34,616 while the
broader Nifty50 index of the National Stock Exchange (NSE) lost 80 points, or 0.75 per cent, to settle at 10,516.
The fifth straight day of
losses for the domestic equity indices also saw momentum indicator moving average convergence divergence, or MACD, signal bearish crossovers
Solutions, Tata Steel, Just Dial, Axis Bank, Adani Enterprises, Wipro and BEML.
Some of these counters have also been witnessing strong
trading volumes of late, adding further credibility to the emerging trend.
Among other stocks that saw bearish crossovers were PNC
Infratech, Intellect Design, Praj Industries, Windsor Machines, Kridhan Infra, Genus Power Infrastructure, CCL Products India, Aditya Birla
Fashion, Omaxe and Suven Life Sciences.
MACD is a trend-following momentum indicator and is the difference between the 26-day and 12-day
exponential moving averages
opportunities.
When the MACD slips below the signal line, it gives a bearish signal on the charts, indicating that the price of the security
may experience a downward trend or vice-versa.
However, the MACD alone may not be sufficient to help take an investment call.
Traders should
use other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and stochastic to
confirm such a trend.
Retail investors should consult a financial expert before buying or selling a stock based on such technical
indicators.
MACD charts also showed bullish crossovers on 16 counters on Tuesday, signalling opportunities to buy these stocks ahead of a
fresh bounce in prices.
The stocks included Dwarikesh Sugar, Berger Paints, Mawana Sugars, Dalmia Bharat Sugar and Uttam Sugar Mills.
The
Nifty50 index on Monday formed a bearish candle on the daily chart even as the index made lower highs and lower lows for the fourth
consecutive session, suggesting that its supports were shifting lower
Analysts, however, said a small pullback cannot be ruled out.
As long as the Nifty50 holds below 10,550, its weakness could extend till its
next support at 10,440 and 10,400 levels, said Chandan Taparia of Motilal Oswal Securities, who believes the index will face a hurdle at
10,600 on the upside.
Understanding MACDA close look at the chart of the Axis Bank stock showed whenever the MACD line has crossed below the
signal line, the stock has shown a downward momentum and vice versa
Shares of the bank closed 1.14 per cent lower at Rs 526.85 on May 21.
