INSUBCONTINENT EXCLUSIVE:
NEW DELHI: As the Nifty50 index ended 68 points, or 0.63 per cent, lower at 10,628 on Monday, momentum indicator moving average convergence
divergence, or MACD, signalled downward crossover on as many as 85 counters on NSE.
The MACD is known for identifying trend reversals.
Among
the stocks that saw bearish crossovers were Axis Bank, Edelweiss Financial Services, Future Enterprises, Vijaya Bank, Havells India, RBL
also been witnessing strong trading volumes, adding further credibility to the emerging trend.
Other stocks that witnessed bearish
crossovers included GMR Infrastructure, Vikas Ecotech, Bharat Electronics, RattanIndia Power, United Breweries and Welspun Enterprises.
MACD
is a trend-following momentum indicator and is the difference between the 26-day and 12-day exponential moving averages
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 movement, and vice-versa.
However, the MACD alone may not be a sufficient indicator to help take an investment
call.
Traders should make use of other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick
patterns and Stochastic to confirm such trends.
Retail investors should consult financial experts before buying or selling stocks based on
They included Firstsource Solution, Bajaj Auto, Cerebra Integrated Tech, Va Tech Wabag, IIFL Holdings, Tips Industries, Future Lifestyle,
HPL Electric Power and Rama Steel Tubes.
On Monday, the Nifty50 pack formed a Bearish Engulfing Pattern on the daily chart
A breach of the 10,600-620 range in the coming session may further weaken the technical outlook for the index.
On the other hand, the 10,770
level proved a strong hurdle and may remain so over the next few sessions.
Over the past three sessions, the Nifty50 failed to cross
multiple resistance zone between 10,780 and 10,790 levels, which now remains a crucial hurdle, said Rajesh Palviya, Head Technical
Derivatives Analyst at Axis Securities.
Understanding MACDA close look at the chart of Havells India shows whenever the MACD line has
crossed below the signal line, the stock has always shown a downward momentum and vice versa
Shares of the company closed 0.40 per cent down at Rs 537.25 on Monday, June 4.
