IIFL Securities expects Nifty50 finds support at 11,238 while it sees resistance around 11,400. On Tuesday, the index hit a high of 11,373.60.
NEW DELHI: NSE benchmark Nifty50 might be seeing selling at higher levels, but at least 230 stocks are showing strong bullish bias on the moving average convergence divergence, or MACD, charts. The momentum indicator signalled bullish crossovers — a sign of bullish undertone — on these counters, hinting at possible upsides in the days ahead.
Many of these stocks have been witnessing strong trading volumes of late, lending credence to the emerging trend. The list included stocks like Vodafone Idea, ITC, Nalco, Asian Paints, Bharat Electronics, NTPC, UPL, Emami, REC, India Cements and Coal India, among others.
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 indicate ‘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.
Stocks like Indiabulls Real Estate, Petronet LNG, Lemon Tree House, Indian Hotels, TCS, Dhampur Sugar and Berger Paints are also showing a bullish sentiment on this chart.
Data also showed five stocks are showing bearish trends: HCL Technologies, Edelweiss Financial Services, Canara Bank, Inventure Growth and Bhagyanagar Properties.
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Analysts say while the MACD is a substantial trend detector, it 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.
This is because MACD is a trend-following indicator. While one can increase the sensitivity of MACD by using shorter moving averages for computing MACD (e.g. 5-day and 12-day moving averages), the lag effect will still be there. Hence, one should make use of other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and Stochastic to confirm an emerging trend.
9 stocks that analysts say can give solid returns over 2-3 weeks
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Some signs of fatigue have crept in the market after an almost unhindered rally from March lows. Technical analysts find Nifty overstretched on the short-term charts and believe this may force the market to go into consolidation. "We recommend approaching the market selectively and avoiding major exposures unless there are some consolidation moves, which will make the current vertical move healthier," said Milan Vaishnav, CMT, MSTA is a Consultant Technical Analyst and founder of Gemstone Equity Research & Advisory Services.
Based on the recommendations of different analysts, we picked the following stocks, which they say have the potential to deliver gains in the short term.
Some signs of fatigue have crept in the market after an almost unhindered rally from March lows. Technical analysts find Nifty overstretched on the short-term charts and believe this may force the ma..
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After moving in a sideways range movement over the last few weeks, the stock price witnessed a sharp upside breakout in the last week and closed higher. The analyst observes a positive chart pattern like higher tops and bottoms on the weekly chart. Presently, the stock price is moving upwards to form a new higher top of the sequence. The volume on the counter expanded along with upside breakout in the stock price. A positive pattern in the weekly 14 period RSI signals the possibility of further upside in the stock price for the near term. Buying can be initiated in the stock and one can add more on dips down to Rs 118, wait for the upside target of Rs 135 in the next 3-4 weeks with a stop loss of Rs 114. (Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC Securities)
After moving in a sideways range movement over the last few weeks, the stock price witnessed a sharp upside breakout in the last week and closed higher. The analyst observes a positive chart pattern ..
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The weekly timeframe chart of Nava Bharat Ventures signals an important turnaround in the medium-term trend of the stock price. The intermediate downtrend of the last couple of years seems to be over. The price action of the last 3-4 months signals a significant ‘W’ type bottoming pattern or a rounding type bottoming formation with the neckline of around Rs 60. A recent higher bottom formation at Rs 46 of last week indicates more evidence for the bulls to participate from here on. Weekly 14-period RSI is turning above Rs 45 and is expected to move up to upper Rs 60 levels. This is a positive indication for the upside momentum of the stock price. One may look to buy the stock at current prices, add more on dips down to Rs 49 and wait for the upside target of Rs 60 in the next 3-4 weeks. Place a stop loss of Rs 46.50. (Analyst: Nagaraj Shetti, Technical Research Analyst, HDFC Securities)
The weekly timeframe chart of Nava Bharat Ventures signals an important turnaround in the medium-term trend of the stock price. The intermediate downtrend of the last couple of years seems to be over..
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From last three weeks, the stock is witnessing narrow range activity near 200-day SMA. The stock is hovering between Rs 1,675 to 1,800 price ranges. But after a long time, it managed to close above Rs 1,790 resistance and also formed a strong bullish candle on weekly charts which indicates high chances of uptrend rally from the current level. Further, on daily and weekly charts, the stock has formed promising higher lows series pattern which is broadly positive for the stock. For the swing traders, Rs 1,745 should act as a sacrosanct level. Trading above the same, the analyst expects the continuation of uptrend rally to Rs 1,925. Stop loss suggested for the trade at Rs 1,745. (Analyst: Shrikant Chouhan, Executive Vice President - Equity Technical Research, Kotak Securities)
From last three weeks, the stock is witnessing narrow range activity near 200-day SMA. The stock is hovering between Rs 1,675 to 1,800 price ranges. But after a long time, it managed to close above R..
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The stock is witnessing strong price volume activity post breakout. In the last week, it rallied over 7%. The important point is that the stock not only surpassed its previous resistance of Rs 182 but comfortably managed to sustain above the same. On daily and weekly charts, the stock has formed breakout continuation pattern which is grossly positive for the Jindal steel. For the next few trading sessions, Rs 191 should be the trend decider level for the bulls; sustaining above the same, the analyst expects a continuation of uptrend in stock to Rs 215. Further uptrend may also continue which could the stock to Rs 225. Stop loss suggested for the trade at Rs 191. (Analyst: Shrikant Chouhan, Executive Vice President - Equity Technical Research, Kotak Securities)
The stock is witnessing strong price volume activity post breakout. In the last week, it rallied over 7%. The important point is that the stock not only surpassed its previous resistance of Rs 182 bu..
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Post quick pullback rally from Rs 35 to Rs 55, the stock is witnessing a narrow range activity. However, on daily charts stock, it has formed higher bottom series pattern along with positive SAR series on weekly charts which indicate uptrend is likely to continue in near-term. In addition, on daily charts, the stock has formed a strong bullish candle and is witnessing incremental volume activity. This suggests high chances of short-term uptrend wave from current levels. In the short run, Rs 51 should be the key level to watch out for. If the stock manages to trade above the same, then we can expect uptrend continuation wave up to Rs 65. Stop loss suggested for the trade at Rs 51. (Analyst: Shrikant Chouhan, Executive Vice President - Equity Technical Research, Kotak Securities)
Post quick pullback rally from Rs 35 to Rs 55, the stock is witnessing a narrow range activity. However, on daily charts stock, it has formed higher bottom series pattern along with positive SAR seri..
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This counter appears to have registered a consolidation breakout as it decisively closed above the downsloping trendline, which was in progress from the highs of Rs 357 registered on 20th of last April, on relatively much higher volumes. However, it needs a close above Rs 330 levels to strengthen its momentum further. In that scenario, it can briskly move ahead to test its 200-day simple moving average whose value is present around Rs 362 levels. Considering the fact that technical stop loss level is somewhat away from the current levels, traders are advised to adopt a two-pronged strategy of buying now and adding further on dip, if any, into the zone of Rs 311-307 and look for a target of Rs 360. Stop suggested for the trade is a close below Rs 299 levels. (Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in)
This counter appears to have registered a consolidation breakout as it decisively closed above the downsloping trendline, which was in progress from the highs of Rs 357 registered on 20th of last Apr..
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This counter might have initiated a fresh leg of the upswing from recent lows of Rs 105 levels and appears to be on the verge of a major breakout as hinted by huge volumes over the last couple of trading sessions. However, for the time being, this counter appears to be facing some resistance from its upward sloping trend line which is in progress from the top of Rs 101 registered on 20th April. Hence, once it manages a close above the resistance point of said trendline placed around Rs 125, it can initially head towards its 200-day moving average of Rs 132 which has successfully curbed the upwards rallies in recent past on multiple occasions. However, based on the volumes of last couple of sessions, higher targets going forward can't be ruled out. Hence, positional traders are advised to buy now, and any dip, due to market volatility, into the zone of Rs 118-116 shall be considered as an opportunity to add further. The initial target for the stock can be expected at Rs 132 and beyond that Rs 145 is not ruled out. (Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in)
This counter might have initiated a fresh leg of the upswing from recent lows of Rs 105 levels and appears to be on the verge of a major breakout as hinted by huge volumes over the last couple of tra..
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This counter appears to have registered a consolidation breakout as it witnessed a strong up move on the back of huge volumes from its narrow trading range of last couple of trading sessions. This kind of price behaviour may be hinting that this counter has initiated a fresh leg of upswing from the recent low of Rs 237. Hence, sustaining above the said low, it can head to its logical target placed at Rs 311. Therefore, positional traders are advised to buy into this counter and add further if it corrects into the zone of Rs 246-242, and look for a target of Rs 297. Stop suggested for the trade is a close below Rs 236. (Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in)
This counter appears to have registered a consolidation breakout as it witnessed a strong up move on the back of huge volumes from its narrow trading range of last couple of trading sessions. This ki..
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The stock has maintained a strong bottom near Rs 320 levels and formed a bullish positive candle to imply strength. It has the potential to carry the momentum further in coming days. The RSI also indicated a trend reversal and is in a strong bias. The analyst suggests buying and accumulating this stock for an upside target of Rs 375-385 levels keeping the stop loss of Rs 320. (Analyst: Vaishali Parekh, Senior technical analyst, Prabhudas Lilladher)
The stock has maintained a strong bottom near Rs 320 levels and formed a bullish positive candle to imply strength. It has the potential to carry the momentum further in coming days. The RSI also ind..
On Tuesday, the Nifty50 topped the 11,350 mark, but saw some selling pressure later. "Nifty has approached a strong resistance zone of 11,300-11,350 and although there is no sign of weakness yet, it will not be easy for the index to overcome this sturdy wall," said Sameet Chavan of Angel Broking.
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"On the sectoral front, pharma stocks continue with their dream run and clearly there is no stopping for it. Also, few counters from auto and capital goods showed tremendous strength. The midcap space which has been buzzing since the last few days, has been the centre of attraction. Traders are advised to keep following such stock -centric moves; but we reiterate it is also important to keep booking profits and avoid aggressive bets overnight,” he said
IIFL Securities expects Nifty50 finds support at 11,238 while it sees resistance around 11,400. On Tuesday, the index hit a high of 11,373.60.
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Understanding MACD A close look at the stock chart of Bharat Electronics shows whenever the MACD line has breached above the signal line, the stock has shown upward momentum and vice versa. On Tuesday, the scrip was trading 0.3 per cent down at Rs 107.90 on NSE.
