Infy, Tata Steel, Coal India among 60 stocks readying to rally, shows MACD
Strong trading volumes on many of these counters are lending credence to the emerging trend.
By ETMarkets.com |
BCCL
The good thing about the ongoing rally is that participation is widening in the market, as evident from the 7 per cent surge in BSE Smallcap index and 4 per cent rise in BSE Midcap index.
NEW DELHI: Nifty50 turned sideways on Tuesday after scaling a record high level on Monday, when it took out the crucial resistance at 12,290 level. If it stays there, chances are that the index would soon hit the 12,400 mark for first time ever.
The good thing about the ongoing rally is that participation is widening in the market, as evident from the 7 per cent surge in BSE Smallcap index and 4 per cent rise in BSE Midcap index.
As such, at least five dozen stocks from the broader market are signalling buildup of a strong momentum, shows technical indicator moving average convergence divergence or MACD.
The momentum indicator formed a bullish crossover on 63 counters on NSE, hinting at possible upsides. Strong trading volumes on many of these counters are lending credence to the emerging trend.
The largecaps on this list included Infosys, Tata Steel and Coal India. Among others, Adani Power, Just Dial, Avenue Supermarts, LIC Housing Finance, Bharat Electronics, L&T Finance, Petronet LNG and Tata Coffee have also witnessed bullish crossovers on the momentum 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.
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.
Global brokerages on pharma, cement, telecom
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December was another month of double-digit domestic growth for the pharma industry, especially for Ipca, Glenmark and Lupin. CLSA expects 11% YoY growth in the Indian pharma sector for Q3FY20.
December was another month of double-digit domestic growth for the pharma industry, especially for Ipca, Glenmark and Lupin. CLSA expects 11% YoY growth in the Indian pharma sector for Q3FY20.
Nomura sees a likely pick-up in demand in December. The brokerage believes lower costs may offset lower realizations. It maintains BUY on Ultratech with a target price of Rs 5,500 per share.
Nomura sees a likely pick-up in demand in December. The brokerage believes lower costs may offset lower realizations. It maintains BUY on Ultratech with a target price of Rs 5,500 per share.
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The brokerage maintains equal-weight on Infosys, with a target price of Rs 830 per share. It believes 24% P/E discount to TCS could narrow and share price could rise relative to the country index.
The brokerage maintains equal-weight on Infosys, with a target price of Rs 830 per share. It believes 24% P/E discount to TCS could narrow and share price could rise relative to the country index.
Data showed 18 stocks have formed bearish crossovers on the MACD charts, signaling bearish trends. They included TCS, Reliance Capital, Dhampur Sugar, Indian Overseas Bank and Music Broadcast, among others.
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However, analysts say the MACD indicator should not be seen in isolation, as it may not be sufficient to take a trading call based on it, just the way a fundamental analyst cannot give a ‘buy’ or ‘sell’ recommendation using a single valuation ratio.
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As for Nifty50, the trend is positive, and supports are shifting higher gradually. “The index has to continue to hold above the 12,220 -12,250 range for an up-move towards the 12,400 level. On the downside, major supports are seen at 12,200 and 12,150 levels,” said Chandan Taparia of Motilal Oswal Securities.
Understanding MACD A close look at the stock chart of Infosys 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 flat at Rs 773.05.
