The momentum indicator has signalled bullish crossovers on such stocks — a sign of bullish undertone — hinting at possible upsides in the days ahead.
Apart from these, the list also includes Birla Tyres, Saint-Gobain Sekurit, Mahindra CIE, Tinplate Company, Sun Pharma Advanced Research, Mphasis, PNB Housing Finance and PI Industries, among others.
Chambal Fertilisers, Borosil, Kesoram Industries, CanFin Homes and LT Foods are some other stocks sending bullish signals on the technical indicator.
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.
Data also showed that 56 BSE-listed stocks were showing bearish trends. They include Ashok Leyland, Canara Bank, HFCL, Bombay Dyeing, Inox Wind, IIFL Finance and Gateway Distriparks among others.
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.
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. 5-day 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 was trading at 18,093.40, down 16 points.
“Since Nifty remained in a slender range on Monday, levels are more or less unchanged. For the current session, 18,200 would be seen as an immediate hurdle; whereas on the lower side, 18,000 followed by 17,850 are to be considered as key supports. Because any violation of these levels would lead to some weakness in our benchmark index,” said Sameet Chavan of Angel One.