NEW DELHI: Nifty50 has failed to extend the rally the way it was expected to, after it breached the crucial 12,000-12,050 range.But analysts believe the broader market trend is intact and the index would head for the 12,400 level sooner than later after a brief consolidation.A few dozen stocks from the broader market are already showing buildup of momentum, suggests moving average convergence divergence, or MACD.The momentum indicator formed a bullish crossover on 45 counters on NSE, hinting at possible upsides.
Strong trading volumes on many of these counters are lending credence to the emerging trend.The list included Coal India, JSW Energy, Havells India, Pidilite Industries, SREI Infra, LT Foods and Radico Khaitan besides Trent, ABB India, Lovable Lingerie and JK Lakshmi Cement.The 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.
A nine-day exponential moving average, called the signal line, is plotted on top of the MACD to reflect buy or sell opportunities.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 53 stocks are showing bearish trends.
They included Dish TV, ICICI Bank, Suven Life Sciences, Central Bank, SPARC, IRB Infra and Eicher Motors, among others.Analysts said 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 sell recommendation using a single valuation ratio.As for Nifty outlook, Sameet Chavan of Angel Broking believes there is no sign of weakness in the market so far.
We remain optimistic and expect the index to surpass the 12,150 mark and go beyond in the near term.
Traders are advised to keep a positive bias and use dips as a buying opportunity.
The 12,000-11,883 range is likely to offer good support to the index, he said.The trend may become bullish, once Nifty crosses above the 12,150 level, said Amit Shah of Indiabulls Ventures.
In such a case, Nifty can move swiftly to the 12,400 level, he said.Morgan Stanley on Biocon3 Dec, 2019Morgan Stanley maintains overweight on the stock with a target price of Rs 350 per share.
The firm launched its second Biosim in the US i.e trastuzumab.
The brokerage believes the company has sufficient capacity to address demand in the US.
Biocon/Mylan can generate $180-220 million sales at high margins in one to two years.Nomura on M-M3 Dec, 2019Nomura maintains buy rating on M-M with a target price of Rs 740 per share.
Management says rural demand outlook is improving.
The stock trades at 7x FY20F core EPS and the brokerage believes the valuations are attractive for M-M.Citi on Coal India3 Dec, 2019Citi maintains buy rating on Coal India with a target price of Rs 270 per share.
The brokerage note Coal India's November despatches are down 8% YoY, though better in QoQ terms.
CIL stock is down ~20% in 6 months.
At 7x 1-Year forward PE, risk-reward is favorable.JP Morgan on Financials3 Dec, 2019The brokerage recommends tight take profit levels in ongoing resolution trade.
Credit growth and earnings/RoE visibility are key challenges for the sector which will limit valuation mean reversion.
It recommends moving to HDFC Bank, Kotak Bank, SBI Life and Bajaj Fiance.Understanding MACDA close look at the stock chart of Pidilite Industries shows whenever the MACD line has breached above the signal line, the stock has shown an upward momentum and vice versa.
On Tuesday, the scrip traded 0.02 per cent higher at Rs 1,320 on NSE in a depressed market.