Axis Bank, Tata Steel & Wipro among 46 stocks likely to fall, shows MACD

NEW DELHI: Dalal Street witnessed another session of brisk selling on Monday, as rising crude prices, falling rupee and BJP’s political setback in Karnataka marred investors' risk appetite.

The S&P BSE Sensex slipped 232 points, or 0.67 per cent, to close at 34,616 while the broader Nifty50 index of the National Stock Exchange (NSE) lost 80 points, or 0.75 per cent, to settle at 10,516.

The fifth straight day of losses for the domestic equity indices also saw momentum indicator moving average convergence divergence, or MACD, signal bearish crossovers on 46 counters on NSE.

Among the stocks that witnessed downward crossovers in Monday’s session included Indiabulls Real Estate, Firstsource Solutions, Tata Steel, Just Dial, Axis Bank, Adani Enterprises, Wipro and BEML.

Some of these counters have also been witnessing strong trading volumes of late, adding further credibility to the emerging trend.

Among other stocks that saw bearish crossovers were PNC Infratech, Intellect Design, Praj Industries, Windsor Machines, Kridhan Infra, Genus Power Infrastructure, CCL Products India, Aditya Birla Fashion, Omaxe and Suven Life Sciences.


MACD is a trend-following momentum indicator and 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 slips below the signal line, it gives a bearish signal on the charts, indicating that the price of the security may experience a downward trend or vice-versa.

However, the MACD alone may not be sufficient to help take an investment call.

Traders should use other indicators such as Relative Strength Index (RSI), Bollinger Bands, Fibonacci Series, candlestick patterns and stochastic to confirm such a trend.

Retail investors should consult a financial expert before buying or selling a stock based on such technical indicators.

MACD charts also showed bullish crossovers on 16 counters on Tuesday, signalling opportunities to buy these stocks ahead of a fresh bounce in prices.

The stocks included Dwarikesh Sugar, Berger Paints, Mawana Sugars, Dalmia Bharat Sugar and Uttam Sugar Mills.

The Nifty50 index on Monday formed a bearish candle on the daily chart even as the index made lower highs and lower lows for the fourth consecutive session, suggesting that its supports were shifting lower. Analysts, however, said a small pullback cannot be ruled out.

As long as the Nifty50 holds below 10,550, its weakness could extend till its next support at 10,440 and 10,400 levels, said Chandan Taparia of Motilal Oswal Securities, who believes the index will face a hurdle at 10,600 on the upside.

Understanding MACD

A close look at the chart of the Axis Bank stock showed whenever the MACD line has crossed below the signal line, the stock has shown a downward momentum and vice versa. Shares of the bank closed 1.14 per cent lower at Rs 526.85 on May 21.