NBCC, NTPC, ONGC, HPCL, D-Mart among 100 stocks readying to rally, shows MACD
These stocks have been witnessing strong trading volumes of late.
US President Donald Trump’s optimistic tone on ‘genuine’ trade deal efforts from China also helped lift the sentiment.
Along with these fundamental changes, the outlook has turned bullish for over 100 largecap and midcap stocks on the technical charts.
And the moving average convergence divergence, or MACD, suggests these stocks look set to head higher in the coming days.
The momentum indicator signalled a bullish crossover on these counters, hinting at possible upsides. These stocks have been witnessing strong trading volumes of late, lending further credence to the emerging trend.
The list included Dish TV, Indiabulls Housing Finance, Jindal Streel & Power, IDBI Bank and NBCC.
NTPC, Britannia, Canara Bank, ONGC, HPCL, Adani Ports, Larsen & Toubro, Bajaj Finance, Jubilant Foodworks, Grasim, D-Mart and Sun TV are among other stocks forming similar bullish crossovers on the daily scale.
The 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 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, 22 stocks are signalling bearish trends. They included SBI Life Insurance, Opto Circuits, AU Small Finance Bank, Everest Kanto, Alembic, Mahindra Holidays and ARSS Infrastructure.
Analysts said the MACD indicator 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.
Analysts see further legs to the ongoing Nifty50 rally. It may get extended towards the 11,150-11,250 range in the coming days, said Sameet Chavan at Angel Broking.
“Traders are advised not to take any contrarian bet and instead use dips to go long. Ideally, one should adopt a stock-specific approach. For Nifty, immediate support should come in at 11,000 followed by 10,930 levels,” Chavan said.
A close look at the stock chart of IDBI Bank shows whenever the MACD line has breached above the signal line, the stock has shown an upward momentum and vice versa. On Tuesday, the scrip traded 0.89 per cent higher at Rs 28.30 on NSE.