Stock Market

MACD charts show RIL, PNB, IOC among 117 stocks at risk of sharp fall

   Download Android App    Share in      FullScreen   CheckVideos

NEW DELHI: As the Nifty50 index ended in the red on Monday, momentum indicator moving average convergence divergence, or MACD, signalled downward crossovers for 117 stocks on NSE. MACD is known for identifying trend reversals. Among the stocks that saw bearish crossovers were Punjab National Bank, IndianOil, India Cements, Bank of India, Andhra Bank, Hindustan Petroleum, Cadila Healthcare, Reliance Industries and Allahabad Bank. Some of these stocks have also been witnessing strong trading volumes, adding further credibility to the emerging trend. Other stocks that saw downward crossovers included Bharat Petroleum, LT Finance Holdings, Tata Power, Indian Bank, ILFS Transportation, Bharat Forge, Bajaj Electricals, Indiabulls Housing Finance, NCL Industries and Rashtriya Chemicals. MACD is a trend-following momentum indicator, and 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 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 sufficient to help take an investment call.

Traders should also make use of other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and stochastic to confirm any trend. Retail investors should consult a financial expert before buying or selling a stock based on such technical indicators. Meanwhile, MACD charts also showed bullish crossovers on 10 counters on NSE, giving ‘buy’ signals. They included Infosys, Just Dial, Dr Lal Pathlabs, Next Mediaworks, Cholamandalam Investment and Finance and LT Technology Services. Domestic stocks ended lower for the second straight session on Monday, dragged down by industry heavyweights such as RIL, HDFC twins, SBI, YES Bank, Axis Bank and ICICI Bank. The rupee hit an all-time low of 69.93 against the US dollar, as heavy selloff in global currencies, including the Turkish lira, fuelled demand for safe haven assets. The Nifty50 pack dropped 73.75 points, or 0.65 per cent, to settle at 11,356, with 19 constituents ending in the green and 31 in the red. During the process, the index formed a Falling Window pattern, meaning a downside gap on the charts.

A Falling Window implies that the weakness might persist in the next session, though it would require a confirmation, said Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory. Mazhar Mohammad, Chief Strategist-Technical Research Trading Advisory, Chartviewindia.in, said: “This selloff resulted in the breach of a critical support available in the form of nine-day EMA, which offered support to the Nifty50 during corrections in this leg of the upward move from the low of 10,550, suggesting the possibility of significant weakness going forward.” Understanding MACDA closer look at the chart of Infosys 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 1.75 per cent higher at Rs 1,409 on August 13.




Unlimited Portal Access + Monthly Magazine - 12 issues-Publication from Jan 2021

Buy Our Merchandise (Peace Series)

 

Contribute US to Start Broadcasting


It's Voluntary! Take care of your Family, Friends and People around You First and later think about us. Its Fine if you dont wish to contribute and if you wish to contribute then think about the Homeless first and Feed them. We can survive with your wishes too :-). You can Buy our Merchandise too which are of the finest quality.

Debit/Credit/UPI

UPI/Debit/Credit

Paytm

STRIPE

Details
Category: Stock Market


21