INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Picking from where they had left on Friday, the bulls on Dalal Street hit a new milestone on Monday aided by heavy buying in
banking, pharma and metal stocks
Better quarterly earnings, normal monsoon and a cut in GST rates added the optimism among investors
The SP BSE Sensex gained 157 points to shut shop at 37,494 while the broader Nifty50 index of the National Stock Exchange (NSE) added 41.20
points to close at 11,319.
However, even as stock valuations have peaked, there are indications that long-term investment commitments are
Combined delivery volumes on the BSE and NSE dropped to 32.96 per cent in July, marking the lowest point in five years, in signs that the
ongoing rally may not sustain for long.
Yet, momentum indicator moving average convergence divergence, or MACD, on Monday showed bullish
crossovers on 63 counters on NSE
The MACD is known for signalling trend reversal in a traded security or index.
Among the counters that saw bullish crossovers were PC
Jeweller, Jaiprakash Associates, Usha Martin, Aurobindo Pharma, Wockhardt, Manali Petrochem, Ruchi Soya Industries, Bhansali Engg, Greaves
Cotton, Glenmark Pharma and Avenue Supermarts
Some of these counters have also been witnessing strong trading volumes recently, adding further credibility to the emerging trend.
Other
stocks that saw this bullish indication included Rico Auto Industries, Triveni Engineering Industries, The New India Assurance, India
Tourism Development Corporation, Centrum Capital, Pennar Industries, Indostar Capital Finance, BL Kashyap Sons, GHCL and Bharat Dynamics
They included J Kumar Infraprojects, Munjal Showa, Quess Corp, Eris Lifesciences, Lux Industries, HSIL, Agro Tech Foods, DIC India and
MACD is a trend-following momentum indicator and 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.
Market veterans say the MACD alone may not be a sufficient signal 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 an emerging trend
Retail investors should consult financial experts before buying or selling a stock based on such technical indicators.
On Monday, the
Nifty50 index closed above the 11,300 level for the first time ever
It formed a small bullish candle on the daily chart that resembled a 'Hanging Man'
time is ripe to take some profit off the table
Nagaraj Shetti of HDFC Securities is upbeat on the market
He said there is further upside in store
Understanding MACDA close look at the Jaiprakash Associates stock chart shows whenever the MACD line has crossed above the signal line, the
stock has always shown an upward momentum and vice versa
Shares of the company closed 2.67 per cent higher at Rs 15.40 on July 30.
