NBCC, DHFL, ALL, Zee, ONGC among 234 stocks set to rally, shows MACD

Many of these stocks have been witnessing strong trading volumes of late.

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The positive momentum is restricted to largecaps, as 234 stocks across the market caps look strong on technical charts, as suggested by moving average convergence divergence, or MACD.
NEW DELHI: Exit poll projections have given a huge lift to the stock market, helping NSE benchmark Nifty50 to take out its record high of 11,856 early Tuesday.

The positive momentum is restricted to largecaps, as 234 stocks across the market caps look strong on technical charts, as suggested by moving average convergence divergence, or MACD.

The momentum indicator signalled a bullish crossover -- a sign of bullish undertone -- on these counters, hinting at possible upsides. Many of these stocks have been witnessing strong trading volumes of late, lending credence to the emerging trend.


The list included DHFL, Ashok Leyland, Adani Ports, L&T Finance, Zee Entertainment and Indiabulls Real Estate, Adani Green BHEL, NBCC and ONGC. ITC, Power Grid, IDBI Bank, Tata Power and Allahabad Bank have also sent out bullish signals on the technical charts, data suggests.

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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.

5 stocks that may gain from post-election rally
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BSE Sensex witnessed its biggest single-day rally since September 10, 2013 after exit polls projected a comfortable victory for the Narendra Modi-led NDA government. Experts said Monday’s rally was just the beginning exit polls hold true.

Karvy Stock Broking lists five stocks that are all set to gain from post-election rally:
BSE Sensex witnessed its biggest single-day rally since September 10, 2013 after exit polls projected a comfortable victory for the Narendra Modi-led NDA government. Experts said Monday’s rally was j..
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The bank's asset quality improved with gross NPA declining to 6.7% and net NPA declining to 2.06%; Net Interest Income improved by 27% and Net Interest Margin improved to 3.71%. The bank is on its way to recovery. Underlying loan growth is healthy and the bank is also diversifying its loan book to make it less risky. ROE of the bank should improve significantly in FY20.
The bank's asset quality improved with gross NPA declining to 6.7% and net NPA declining to 2.06%; Net Interest Income improved by 27% and Net Interest Margin improved to 3.71%. The bank is on its wa..
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It did a successful OFS recently which is encouraging. The Insurance sector will benefit from any rally in equity markets and any decline in bond yields will also benefit the company by improving value of investments. Besides, India is still underpenetrated in terms of Insurance and the sector has significant growth potential. In its most recent quarterly update, APE grew by 15.5% YoY while profits grew 18%. The company trades at a P/EV (Embedded value) of 3.6X.

It did a successful OFS recently which is encouraging. The Insurance sector will benefit from any rally in equity markets and any decline in bond yields will also benefit the company by improving val..
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It is well poised to benefit from growth in the market for Biosimilars as well as research services (Syngene) and the company is likely to maintain growth momentum. EPS is likely to grow in the range of 15% in FY20.


It is well poised to benefit from growth in the market for Biosimilars as well as research services (Syngene) and the company is likely to maintain growth momentum. EPS is likely to grow in the range..
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Along with rest of the industry, Mahindra and Mahindra faces headwinds in the near term and Q4FY19 results may be subdued. We believe Auto industry is near its trough. We expect that it's new launches will be well received and a near normal monsoon may lead to recovery in tractor sales. The company trades at an attractive valuation of 12X forward PE.
Along with rest of the industry, Mahindra and Mahindra faces headwinds in the near term and Q4FY19 results may be subdued. We believe Auto industry is near its trough. We expect that it's new launche..
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Data showed just three stocks on NSE are signalling a bearish trend so far. They include Infosys, Sonata Software and Kothari Products.

Down 3 (2)

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.

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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.

Analysts feel the ongoing rally may lift Nifty to 12,000 mark, if the election outcome is in line with exit poll projections. They see good times ahead for stocks in the broader market.

“The positive development (exit polls) has resulted in a complete gush in many midcaps, which had underperformed significantly over the past few months. Going ahead, traders should focus completely on such propositions from the broader market and should keep a close eye on the poll outcome on Thursday,” said Sameet Chavan of Angel Broking.
If the strength is Nifty50 helps it top the 11,856 level on a closing basis, the rally may extend up to 12,100, said Mazhar Mohammad of Chartviewindia.in. “Strong support can be expected around the 11,720 level, where fresh buying can be considered with a stop loss below 11,590 level on a closing basis,” Mohammad said.

Understanding MACD
DHFL snip 1

A close look at the stock chart of DHFL shows whenever the MACD line has breached above the signal line, the stock has shown upward momentum and vice versa. On Tuesday, the scrip closed at Rs 127.15, up 1.84 per cent on NSE.
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