Read Stock Insights by ET for a quick analysis
The momentum indicator signalled bullish crossovers — a sign of bullish undertone — on 25 counters, hinting at possible upsides in the days ahead. The list included HBL Power Systems, Snowman Logistics, Zuari Agro Chemicals, Newgen Software Tech, Muthoot Finance and Dishman Carbogen. These stocks gained up to 14 per cent intraday so far.
Kitex Garments, Future Enterprises, Astec Lifesciences, Surya Roshni and East India are other stocks on the list.
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 indicate ‘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.
This is because MACD is a trend-following indicator. Though traders can increase the sensitivity of MACD by using shorter moving averages for computing MACD (e.g. five- and 12-day moving averages), the lag effect will still be there. Hence, 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, the Nifty50 moved past the 14,750 level. Analysts are cautious though.
"Nifty has broken below the ’20-day EMA’ and any bounce towards 14,775-14,850 is likely to get sold into," said Sameet Chavan of Angel Broking. Nagaraj Shetti of HDFC Securities sees immediate resistance for the index in the 14,800-14,850 range. The index hit a high of 14,854.50 on Tuesday, before paring some gains.
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