Infy, Tata Power, Varun Beverages among 42 stocks ready to rally, shows MACD
When the MACD crosses above the signal line, it gives a bullish signal.
By ETMarkets.com | Updated:
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The momentum indicator signalled a bullish crossover on these counters, hinting at possible upsides.
NEW DELHI: Benchmark equity indices have now advanced for seven straight sessions. Technical indicators are largely positive, even as oscillators are nearing the overbought zone.
Back-to-back positive closings for the indices are having a rub-off on the broader market, where at least 42 such stocks now look stronger on technical charts.
These stocks might be heading higher in the coming days, suggests technical indicator moving average convergence divergence or MACD.
The momentum indicator signalled a bullish crossover on these counters, hinting at possible upsides. Strong trading volumes on many of these counters are lending credence to the emerging trend.
The list included Infosys, Tata Power, Max Financial, Karur Vysya Bank, Torrent Power, Varun Beverages and Shalimar Paints.
Bajaj Finserv, Rallis India, Cholamandalam Finance, Century Plyboards and Music Broadcast are among other stocks showing bullish crossovers on the MACD indicator.
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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.
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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.
Analysts say 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 Nifty50, Sameet Chavan of Angel Broking sees no signs of any trend reversal yet. He expects to see the index taking out the 12,000 level soon.
“Traders are advised to avoid taking any contrarian bets and use intraday dips as buying opportunities. The immediate supports for Nifty are placed at 11,843 and 11,776 levels,” he said.
Nagaraj Shetti of HDFC Securities said a High Wave pattern at the key overhead resistance indicates confusion. “The possibility of a downward correction can't be ruled out from the highs. A sustainable move below the 11,850 level may confirm a negative reversal pattern at the highs,” he said.
Top stocks to bet on this week
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Sensex and Nifty extended their winning run into a sixth straight session on Friday. For the next week, investors will be eyeing next set of quarterly earnings, foreign fund inflows and RCEP meet for fresh cues.
Here are four stocks that could prove good trading plays this week:
Sensex and Nifty extended their winning run into a sixth straight session on Friday. For the next week, investors will be eyeing next set of quarterly earnings, foreign fund inflows and RCEP meet for..
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Over the past couple of months, the stock has been taking support near the 200 levels. This 200-mark has become the support once it was breached on the upside in early 2019. There are fresh signs of emerging momentum appearing on the charts. The MACD has shown a positive crossover; it is now bullish and trades above its signal line. The RSI has just broken out of a pattern while making a bullish divergence against the price. The OBV—On Balance Volume has made a new high. Any close below 205 should be treated as a stop-loss for this trade.
Over the past couple of months, the stock has been taking support near the 200 levels. This 200-mark has become the support once it was breached on the upside in early 2019. There are fresh signs of ..
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The stock is presently in a bullish Ascending Triangle formation and is looking for an upward breakout. The daily RSI has marked a fresh 14-period high with a bullish divergence against the price. The daily MACD remains in a continuing buy mode while the PPO has turned positive. The price has ended outside the upper Bollinger band. This increases the possibility of a sharp move in the price and the acting resulting in a breakout. The most likely resolution of such pattern is in form of an up move in price. Any close below the 392 should be treated as a stop loss for this trade.
The stock is presently in a bullish Ascending Triangle formation and is looking for an upward breakout. The daily RSI has marked a fresh 14-period high with a bullish divergence against the price. Th..
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The metal sector has mostly bottomed out and has seen improving on its broad momentum. The stock is seen reversing on its multi-month downtrend, and it appears to be penetrating the falling trend line drawn from 218 levels. The price has bottomed out 170-184 range and may move ahead, confirming its reversal. The daily MACD has turned bullish, and PPO stays positive. The prices have closed above the upper Bollinger band, and this increases the possibility of up move in prices, though 200-DMA may cause some consolidation at higher levels. Any close below 186 should be treated as a stop-loss for this trade.
The metal sector has mostly bottomed out and has seen improving on its broad momentum. The stock is seen reversing on its multi-month downtrend, and it appears to be penetrating the falling trend lin..
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The Realty sector has seen strong up move over the past couple of days, and this stock attempted to bottom out and confirm a reversal. It has formed a close to triple top formation and it has its 200-DMA acting as its proxy neckline. Any strong move above this level will see strong uptrend over the coming days. The MACD is bullish; it stays in continuing buy mode and trades above its signal line. The PPO is positive. The RS line, when compared against the broader CNX500 is seen reversing its trajectory. The RS line has also penetrated its 50-DMA while the OBV – On Balance Volume has marked a fresh high. Any close below 420 should be treated a stop-loss for this trade.
The Realty sector has seen strong up move over the past couple of days, and this stock attempted to bottom out and confirm a reversal. It has formed a close to triple top formation and it has its 200..
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The options data as of Friday expiry shows that Nifty has maximum Call open inetrest built up at 12,000. The highest Put OI stays at 11,800 strike. Nifty is expected to remain volatile and trade in a broad but defined range.
Sell Nifty NOV 7, 11,850 CALL at 104.05 and Sell Nifty 12,050 PUT at 169.15. Receive Net Premium of Rs 20,490. Maximum Profit Potential: 5,490. The trade will remain profitable above 11,776 and below 12,123.
(IMPORTANT: The Option Prices shown are as of Friday’s Close. The Pay-off Chart, Maximum Loss and Maximum Profit Potential can vary as per the actual execution price. Disclosure under Clause 19 of SEBI (Research Analysts) Regulations 2014: Analyst, Family Members or his Associates holds no financial interest below 1% or higher than 1% and has not received any compensation from the Companies discussed)
(Views and recommendations given are the analyst's own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned)
The options data as of Friday expiry shows that Nifty has maximum Call open inetrest built up at 12,000. The highest Put OI stays at 11,800 strike. Nifty is expected to remain volatile and trade in a..
Understanding MACD A close look at the stock chart of Bajaj Finserv 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 0.82 per cent higher at Rs 8,777 on NSE.
