INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Domestic stocks settled at a nearly 3-month high on Monday as strong corporate earnings and firm global cues gave risk appetite a
The BSE Sensex closed up 191 points, or 0.55 per cent, at 35,160
NSE's Nifty gained 47 points, or 0.44 per cent, to finish at 10,739.
But a look at momentum indicator -- moving average convergence
divergence, or MACD -- suggests bearish crossovers for 65 stocks on the NSE.
MACD is a tool used for identifying trend reversals.
Stocks
that saw bearish crossovers included Nalco, MMTC, Eicher Motors, Glenmark Pharma, Shriram Transport Finance and Indraprastha Gas
Some of these have been witnessing strong volumes, lending credence to the emerging trend
Jammu Kashmir Bank, Jindal Stainless, Havells India, Dollar Industries and Finolex Industries were among others with bearish
crossovers.
MACD is a trend-following momentum indicator and 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 breaches below the signal line, it sends out a bearish signal on the charts, indicating that the price of the
security may experience a downward movement, and vice versa.
MACD crossed below signalHowever, MACD alone may not be sufficient to help one
Traders should make use of other tools such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and
stochastic to confirm such a trend.
Retail investors should consult financial experts before buying or selling a stock based on such
They included Axis Bank, NHPC, HDFC, Bata India, Dena Bank and Karnataka Bank, among others.
MACD crossed above signalThe Nifty index on
Monday formed a small bullish candle on the daily chart
The index has successfully closed above the gap zone between 10,736 and 10,702 levels hit on February 5
It has registered a robust bullish candle on the monthly chart as well, which has erased all the panic losses seen in March
Sustaining above this gap area logically gives the next target of 10,928, said Mazhar Mohammad of Chartviewindia.in.
"We expect the Nifty to
continue its positive momentum
But in the short term, we are expecting the correction to continue, which is part and parcel of the trend
Any dips from this point of time of more than 10 per cent should be bought into for a potential upside of 20 per cent," said Mustafa Nadeem,
CEO, Epic Research.
Understanding MACDA close look at the MMTC chart shows that whenever the MACD strip has gone beyond the signal line, the
stock has shown an upward momentum and vice versa.
The stock closed 1.36 per cent lower at Rs 65.05 on Monday.
