INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Bouts of brisk buying in the market after every few days have made analysts believe that the market is directionally on an
Supports for the key indices are shifting higher, as suggested by the daily charts, even as the indices themselves inch closer to
multiple-resistance zones
Analysts noted that the rebound from the October lows has not only changed the technical setup for the benchmark indices, but also for
dozens of stocks which, riding on heavy volumes, look poised to see positive price actions in the days ahead.
There are as many as 30 stocks
on NSE that look strong on the daily charts, as suggested by momentum indicator moving average convergence divergence, or MACD.
The
technical indicator indicated an upward crossover or bullish signal on these counters, hinting at possible upsides for these stocks.
Some of
these counters have also been witnessing strong trading volumes of late, adding further credibility to the emerging trend.
The list included
Kwality, Infosys, LT Foods, Mindtree and Cadila Healthcare
Cyient, SH Kelkar, Aster DM Healthcare, Tube Investments, MM Forgings, Dixon Technologies and Persistent Systems are some of the other names
showing bullish trends.
The MACD is known for signalling trend reversal in a traded security or index
It 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, indicating that the price of the security may see an upward movement
and vice versa.
Meanwhile, 12 stocks witnessed bearish crossovers on the daily charts.
They include Power Grid, which reported average
quarterly earnings on Monday
Gillette India, Kirloskar Bros
Prajay Engineers, Lokesh Machines and Poly Medicure are some of the other names, showing bearish crossovers on the MACD charts
The MACD indicator should not be seen in isolation and may not be sufficient indicator to take a trading call, just the way a fundamental
Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and Stochastic to confirm an emerging trend on the
MACD charts.
As for the Nity50, analysts are cautiously positive on the index with a short-term view
to remain cautious on the long side, as a negative close on Tuesday may trigger a short-term correction, which may further intensify on a
close below the 10,440 level.
Understanding MACDA closer look at the stock chart of Infosys shows whenever the MACD line has breached above
the signal line, the stock tended to show an upward momentum and vice versa.
On Tuesday, the stock closed 1.23 per cent higher at Rs 674.20
