INSUBCONTINENT EXCLUSIVE:
the last two sessions of the previous week.
While a flareup in the US-China trade war hurt investor mood, technical charts threw up a gloomy
correction in the index looks imminent
That said, many stocks looked strong on the charts, as suggested by moving average convergence divergence, or MACD
The momentum indicator signalled an upward crossover, or bullish signal, on at least 71 counters, hinting at possible upsides in these
Some of these counters have also been witnessing strong trading volume of late, adding further credibility to the emerging trend
Among the stocks that witnessed bullish signals were OMCs IOC, BPCL and HPCL, PowerGrid, Syndicate Bank, Indiabulls Real Estate, Allahabad
Others included Wockhardt, Uttam Galva Steels, CanFin Homes, DCM Shriram and PC Jeweller, among others
The MACD is known for signalling trend reversal in a traded security or index
It is the difference between the 26-day and 12-day exponential moving averages
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
Some 45 stocks showed bearish crossovers on NSE, including Tata Motors, Infosys, FirstSource Solution, SBI Life Insurance, Glenmark Pharma,
KPIT Technologies and Hudco
That said, the MACD indicator should not be seen in isolation and it may not be sufficient to take a trading call based on it, just the way
Market veterans say the MACD alone may not be good enough 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 an emerging trend
For the Nifty50, daily strength indicator RSI and momentum indicator Stochastic both are in the negative terrain, which supports a
weakening trend, said Rajesh Palviya, Head of Technical Derivatives Analyst at Axis Securities
On Monday, the index settled 137.45 points, or 1.19 per cent, lower at 11,377
As long as the index stays below 11,450 level, chances are that it may drift towards 11,333 and then 11,250 levels, said Chandan Taparia of
Motilal Oswal Securities.
Mazhar Mohammad of Chartviewindia.in feels the upside for the Nifty50 is capped at 11,520 and a fresh leg of
towards its recent corrective swing low at 11,250 level.
A close look at the stock chart of IOC shows whenever the MACD line has crossed
above the signal line, the stock has showed an upward momentum and vice versa
On Monday, the stock rose 0.81 per cent to close at Rs 156.50 on NSE.
