INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The Nifty50 once again failed to hold on to the 10,800 level on Monday, thus indicating how strong the bears are around this
However, momentum indicator moving average convergence divergence, or MACD, showed upward crossovers for 134 stocks on NSE.
The MACD is
known for signalling trend reversal in a traded security or index.
Among the stocks that saw bullish crossovers were PC Jeweller, Suzlon
Energy, Jai Corp, HDIL, NCC, IFCI, Tech Mahindra, IDFC and Aurobindo Pharma.
Some of these counters have also been witnessing strong trading
volumes, adding further credibility to the emerging trend.
Other stocks that saw bullish crossovers included Motherson Sumi Systems, Zee
Entertainment, Walchandnagar, Havells India, Manappuram Finance, Apollo Tyres, Jindal Saw, Network18 Media, ITI and Genus Power
MACD is a trend-following momentum indicator and is the difference between the 26-day and 12-day exponential moving averages
When the MACD crosses above the signal line, it gives a bullish signal on the charts, indicating that the price of the security may see an
upward movement, and vice versa
The MACD alone may not be sufficient signal to help take an investment call
Traders 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
Retail investors should consult financial experts before buying or selling a stock based on such technical indicators
They included Bhushan Steel, Fortis Healthcare, Tata Chemicals, Omaxe, Future Lifestyle, Swan Energy, Future Supply Chains and Adhunik
On Monday, the Nifty50 index rose 19.30 points, or 0.18 per cent, to close at 10,786
The formation signalled possibility of a short-term trend reversal.
The index needs to protect the 10,777 level, else selling may push it
lower towards the 10,709 level, marking a significant near-term top at 10,850, said Mazhar Mohammad of Chartviewindia.in
He advised investors to stay neutral and avoid longside bets for the time being.
Understanding MACDA close look at the chart of Apollo Tyres
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 0.18 per cent lower at Rs 275.15 on June 11.
