Market at record high but a fifth of Nifty 500 stocks trade below 200-DMA

The 200-DMA is a key long-term moving average in determining a bullish and bearish trend for any stock or underlying index.

Equity benchmark indices climbed record highs in trades on Monday, June 10, 2024 in anticipation of continued reforms as Prime Minister Narendra Modi-led National Democratic Alliance resumed its third-straight term at the centre.

The S&P BSE Sensex topped the 77,000-mark, and hit a new all-time high at 77,079 in today's intra-day deals. Similarly, the NSE Nifty 50 index zoomed past the 22,400 for the first-time ever.

The benchmark indices have gained around 7 per cent so far this calendar year 2024.

Meanwhile, the Nifty MidCap 150 index registered a summit at 20,085, and the SmallCap 250 at 16,328.

Technically, all broader market and sectoral indices, barring Nifty Media, are seen quoting above their respective 200-DMA (Daily Moving Average). This long-term moving average is a key technical indicator in determining a bullish and bearish trend. 

Despite this existing bullish undertone one out of every 5 Nifty 500 stocks was trading below its 200-DMA. Prominent among these are - Bajaj Finserv, LTIMindtree, VIP Industries, Maharashtra Seamless, LTTS, Angel One, Indiabulls Housing Finance, Motilal Oswal, Delhivery, Titan, UPL, Atul, AU Small Finance Bank, Asian Paints, Tata Elxsi and Zee Entertainment.

Here are five such stocks that at present are trading below the 200-DMA, but now showing some signs of revival and as such can potentially gain up to 12 per cent from here on.

Bajaj Finserv

Current Price: Rs 1,583

Potential Upside: 6.2%

Support: Rs 1,568; Rs 1,520

Resistance: Rs 1,600; Rs 1,635

Bajaj Finserv dipped below its 200-DMA towards the end of May 2024. In the post election panic sell-off, the stock tumbled over 11 per cent from its 200-DMA, but has soon managed to recoup most of the losses.

The stock has been swinging in and out of the 200-DMA pivot, since February. However, given the positive divergence in key momentum oscillators, the stock may look to once again bounce back above its 200-DMA, which stands at Rs 1,600, above which next key hurdles are placed in the Rs 1,620 - Rs 1,635 zone. On the upside, the stock can target Rs 1,680 levels. 

Near support for the stock is seen at Rs 1,568, below which it can test Rs 1,520. CLICK HERE FOR THE CHART

Aether Industries

Current Price: Rs 815

Potential Upside: 7.7%

Support: Rs 789

Resistance: Rs 837

Aether Industries has been trading below its 200-DMA since mid-October 2023. Since, the breakdown the stock has shed nearly 15 per cent. Key momentum oscillators such as the RSI (Relative Strength Index), MACD (Moving Average Convergence-Divergence) and the Slow Stochastic are showing positive divergence on the daily and the weekly charts.

Hence, the stock is likely to attempt a pullback in the near-term, as long as support at Rs 789 is held. As such, the stock can look to test the 200-DMA on its way up at Rs 878. In the interim, resistance can be expected around the 100-DMA at Rs 837. CLICK HERE FOR THE CHART

Alkyl Amines Chemicals

Current Price: Rs 1,970

Potential Upside: 12.2%

Support: Rs 1,865

Resistance: Rs 2,000; Rs 2,100

Alkyl Amines Chemicals stock has declined close to 17 per cent post its breakdown below the 200-DMA in mid-January 2024. The stock at present is seen testing resistance around its short-term moving averages around the Rs 2,000-mark. 

Given the positive divergence, in key momentum oscillators, the stock may attempt to break above the hurdles, and look to test its 200-DMA at Rs 2,210 levels. Interim resistance can be expected around Rs 2,100 levels. Support on the downside is seen at Rs 1,865. CLICK HERE FOR THE CHART

Angel One 

Current Price: Rs 2,600

Potential Upside: 10.5%

Support: Rs 2,573; Rs 2,370

Resistance: Rs 2,660; Rs 2,700

Angel One stock has started to trade below its 200-DMA since the last two months. The 200-DMA at present stands at Rs 2,700, and coincides with other short-term moving averages and super trend line resistance around Rs 2,660 levels. Support for the stock is seen at Rs 2,573 and Rs 2,370.

The stock will need to clear the short-term hurdles in order to rally towards the 100-DMA, which stands at Rs 2,873. CLICK HERE FOR THE CHART

Craftsman Automation

Current Price: Rs 4,437

Potential Upside: 12%

Support: Rs 2,573; Rs 2,370

Resistance: Rs 2,660; Rs 2,700

Craftsman Automation stock has rallied nearly 9 per cent from its recent low of Rs 4,080. The stock seems on course to test Rs 4,970 on its way up, with interim resistance expected around its 200-DMA at Rs 4,620. The stock is likely to trade with a positive bias as long as it holds above Rs 4,300 levels. CLICK HERE FOR THE CHART