Read Stock Insights by ET for a quick analysis
Among specific counters, as many as 54 stocks on NSE looked weak on the MACD charts, as the technical indicator signalled a downward crossover, hinting at possible downsides over the next few days.
Some of these counters have also been witnessing strong trading volumes in recent days, adding further credibility to the emerging trend.
The list included Bharti Airtel, Aditya Birla Capital,
The MACD is known for signalling trend reversals in a traded security or index. 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.
Meanwhile, 25 stocks witnessed bullish crossovers on these charts. They included
The MACD indicator should not be read 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.
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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.
On Tuesday, Nifty traded 12 points, or 0.10 per cent, down at 11,925 around 9.30 am (IST).
Amit Shah, Technical Research Analyst, Indiabulls Ventures said, “Traders should stay short at current levels. The overall trend is still bullish. On the downside, the immediate support is seen in the 11,900-11,800 zone. The 12,000 level will offer immediate resistance but the bullish momentum can sustain only if the index manages above the 12,100 mark.”
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by
A close look at the stock chart of Bharti Airtel shows whenever MACD has breached below the signal line, the stock has tended to show a downward momentum and vice versa. The scrip closed almost flat Rs 445.85 on Monday.
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