The Nifty index has declined nearly 5% in the past one month and is down nearly 2.9% since January.
Most stocks trading above the three key indicators are in sectors such as consumers, pharmaceuticals, capital goods, infrastructure, public sector enterprises, and select banks. Majority of the IT stocks are below crucial moving averages, a reflection of investor aversion at this juncture.
“Stocks are placed at different stages in the price spectrum, as indicated by the key moving averages’ position, and thus may prevent a unilateral fall across the board,” said Anand James, chief market strategist at . “One reason is how some of the sectors have performed during the fall from the peak and recovery thereafter in June. For example, while the Nifty peaked in September, the rate of rise in IT was largely subdued, and the decline from the peak was equally subdued.”
The 20-, 50- , and 200- DMAs are technical indicators signalling short-, mid-, and long-term trends in shares and indices. The rise above these levels suggest strength, while a fall below these levels points to weakness depending on the period considered.
Several mid-cap stocks are still flashing bullish signals mainly because of the retail investor appetite. The outlook for several large-cap stocks, which constitute the Sensex and Nifty, have been uncertain because of foreign institutional selling.
Among the large-cap stocks, , , Larsen & Toubro, , , , and are trading above the key moving averages, while in the mid-cap space, , , Kubota, , , Zee Entertainment and are trading above all three moving averages.
