As many as 59 stocks witnessed bearish crossovers on BSE on Monday, signalling bear grip on these counters. NSEBSEJaiprakash Associate…
PEER COMPANIES TapariaSintex industriesShriram City UnionRadico KhaitanPetronet LNGMotilal Oswaljindal worldwideJaypee InfratechJaiprakash AssociatesHeritage FoodsHDFC bankGulf OilGujarat State PetronetGHCLEssar shippingDish TVBharat Forgeatlas cycles (haryana)Ashoka BuildconEXPAND TO VIEW ALL NEW DELHI: BSE barometer Sensex registered gains for the third session in a row on Monday. Yet, it is difficult to judge whether the bulls have taken a clear lead over the bears. While it might be futile to predict how the indices may perform in the short term, dozens of stocks on BSE are throwing up signals that they could be readying for a major uptrend.
Momentum indicator Moving Average Convergence Divergence, or MACD, popularly known for identifying trend reversals, has signalled upward crossovers for 55 stocks. A similar number of stocks, 59 precisely, saw bearish crossovers in Monday’s session.
Among the stocks that have seen bullish crossovers are Petronet LNG, Tata Power, Rain Industries, HDFC Bank, Radico Khaitan, Gujarat State Petronet, Bharat Forge and Ashoka Buildcon, among others. A bullish crossover suggests that the stock might see a surge from here on.
Some of these counters have been witnessing strong volumes, adding further credibility to the emerging trend. Others included United Spirits, Tejas Network, Jindal Worldwide, Mahindra CIE Auto, Eris Life, Shriram City Union, Gulf Oil Lubricants, Prakash Wool, Gulf Oil Lubricant and Alchemist.
The MACD is a trend-following momentum indicator, which shows the relationship between two moving averages. It is actually 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. A ‘buy’ signal occurs when the MACD rises above its signal line and vice-versa.
In technical analysis, the MACD indicator alone may not be sufficient to help decide an investment call.
Traders should make use of other indicators such as Fibonacci Series, RSI, candlestick patterns, Bollinger Bands and Stochastic to confirm any trend.
It is advisable to consult a financial expert before buying or selling a stock based on such technical indicators.
As many as 59 stocks witnessed bearish crossovers on BSE on Monday, signalling bear grip on these counters. The list included Jaiprakash Associates, Sintex Industries, Dish TV, Essar Shipping, GHCL, Uttam Sugar Mills, Heritage Foods and Atlas Cycles (Haryana).
The 30-share BSE Sensex settled 194.64 points, or 0.61 per cent, higher at 31,882 on Monday, while NSE’s Nifty closed 71.25 points, or 0.72 per cent, up at 10,006.
“The Nifty50 has to continue to hold above the 9,980 level to witness an upward move towards 10,050 and then 10,080, while on the downside, supports are seen at 9,928 and then 9,880 levels,” said Chandan Taparia, Derivatives & Technical Analyst, Motilal Oswal.
A close look at the chart of Jaiprakash Associates shows whenever the MACD line has crossed above the signal line, the stock has always shown an upward momentum. Shares of the company closed 6.42 per cent down at Rs 21.85 on September 11 after the Supreme Court asked the company to deposit Rs 2,000 crore by October 27 in relation to the insolvency proceedings involving Jaypee Infratech.