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NBCC, NTPC, ONGC, HPCL, D-Mart among 100 stocks readying to rally, shows MACD

These stocks have been witnessing strong trading volumes of late.|
Updated: Aug 27, 2019, 04.53 PM IST
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Analysts see 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.
NEW DELHI: The momentum in the domestic stock market has changed overnight, after Finance Minister Nirmala Sitharaman delivered the much-anticipated booster package and RBI’s board approved the Jalan Committee report on transfer of the central bank’s excess reserve to the government.

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.

up a 101

up b 101

up c

UP 4

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.

Down 1 (1)

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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.

Understanding MACD

IDBI snip 1

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.

Top technical stock recommendations for this week

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Your weekly recommendation

26 Aug, 2019
Technical indicators show the market may make see some half-hearted bounce and attempt to stabilise and defend its most recent bottom. But the same may not sustain. The broader market setup remains structurally bearish. Here are four stocks that look like potential buys for this week.

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