INSUBCONTINENT EXCLUSIVE:
NEW DELHI: NSE barometer Nifty50 has been consolidating in a broad range between 11,550 and 11,850 since March-end
The lower end of this range has offered strong support on multiple occasions, but there has been lack of confidence at higher
levels
Analysts say the index could soon attempt to break above the range
This may bode well for stocks across sectors.
At the market close on Tuesday, 30 stocks on NSE were showing a bullish bias on the moving
average convergence divergence, or MACD, charts.
The momentum indicator signalled bullish crossovers -- a sign of bullish undertone -- on
these counters, hinting at possible upsides in the days ahead.
Many of these stocks have also been witnessing strong trading volumes of
late, lending credence to the emerging trend.
The list included ICICI Bank, JSW Steel, BPCL, Oil India, PVR, Hathway Cable and Havells India
Hexaware Technologies, FDC, DIC India, Mangalam Cement and Emmbi Industries also formed part of the list.
MACD is known for signalling trend
reversals in traded securities or indices
It is the difference between the 26-day and 12-day exponential moving averages
When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward
movement and vice versa.
Data also showed some 86 stocks are showing bearish trends
The list included FMCG giant ITC, two-wheeler major Hero MotoCorp, drug maker Biocon, debt-ridden Jaiprakash Associates and plastic product
maker Jain Irrigation Systems.
Other stocks on this list included Adani Gas, Reliance Nippon Life, Gati, Rain Industries, Info Edge and
Ajanta Pharma.
The MACD indicator should not be seen in isolation, as it may not be sufficient to take a trading call, just the way a
fundamental analyst cannot give a 'buy' or 's ell' recommendation 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.
For Nifty50, the hourly charts showed the index has formed a triangle within a triangle
Ratnaparkhi, Senior Technical Analyst at Sharekhan.
