Voda Idea, Dabur, YES Bank trade in oversold zone on NSE; key levels here

The 14-day RSI of Voda Idea, Bank of India, Dabur, YES Bank and DMart stands below 30, indicating oversold condition on the daily chart. In case of a pullback, these stocks can bounce back up to 24%.

As equity markets have been in corrective mode post the record highs in September, several stocks have entered an oversold territory on the daily scale.  The Nifty 50 has declined close to 5 per cent from its all-time of 26,277. The Nifty RSI hit a low of 36.7 and since then has recovered to 45 levels.

Technically, the Relative Strength Indicator (RSI) - a key momentum oscillator helps in determining if a particular stock or index is in an oversold or overbought zone. The RSI is plotted on a 0 - 100 scale, with a reading below 30 considered as oversold, whereas, a reading above 70 is considered overbought.

In general, stocks trading in an oversold zone tend to bounce back as short-term traders look to take advantage of any abnormal movement in the share prices. However, stocks can remain in an oversold or overbought zone for a prolonged period of time. Apart from the RSI other key momentum oscillators can weigh on the market direction.


 

Meanwhile, here are 5 stocks that at present are seen trading in an oversold zone. Vodafone Idea, Dabur India, Bank of India, Avenue Supermarts (DMart) and Yes Bank. Should you consider buying these oversold shares or should you avoid them? Here's what the technical charts suggest:

Dabur India

Current Price: Rs 572

Upside Potential: 7.5%

Support: Rs 562

Resistance: Rs 585; Rs 595

Dabur India 14-day RSI had hit a low of 21.9 last week; since then the RSI has improved and today seen crossing its signal line - which is a positive sign. Further, on the price chart, the Dabur stock was seen consolidating around its 200-DMA (Daily Moving Average) which stands at Rs 569. CLICK HERE FOR THE CHART

Similarly, on the weekly scale, the 20-WMA (Weekly Moving Average) at Rs 562 has been providing support for the Dabur stock. Hence, charts suggest that as long as the stock is able to hold above these key support levels, the stock may attempt an interim pullback.

As such the stock can bounce back to Rs 615 levels, with interim resistance clearly visible at Rs 585 and Rs 595 levels.

 

Vodafone Idea (Voda Idea)

Current Price: Rs 9

Possible Pullback: 24.4%

Support: Rs 8

Resistance: Rs 9.80; Rs 10.50

The 14-day RSI of Voda Idea stock has been in an oversold zone for nearly a month now. However, among the other key momentum oscillators the MACD (Moving Average Convergence-Divergence) has given a positive divergence today. Hence, the stock may attempt a pullback in the near-term.

Even as the overall trend remains bearish for Voda Idea, a short-term pullback to Rs 10.50 - Rs 11.20 seems possible for the stock. Interim resistance for the stock stands at Rs 9.80. On the downside, the stock seems on course to test levels near Rs 5; with interim support seen at Rs 8. CLICK HERE FOR THE CHART

Bank of India (BoI)

Current Price: Rs 104.50

Possible Pullback: 14.8%

Support: Rs 101.80

Resistance: Rs 109; Rs 112

Bank of India stock has been in a downtrend since early May post the breakdown below its super trend line. Over the last 5 months the stock has witnessed a pullback as and when the stock fell into the oversold zone. At present, the 14-day RSI is yet again in an oversold zone near 25 levels. CLICK HERE FOR THE CHART

The weekly chart shows the presence of its 100-WMA support at Rs 101.80 levels - a key moving average the stock has not violated in nearly 2 years. As long as this support is held, the stock can attempt a bounce back to Rs 120 levels. Interim resistance for the Bank of India stock is seen at Rs 109 and Rs 112 levels. 

DMart

Current Price: Rs 4,198

Upside Potential: 7.9%

Support: Rs 4,055; Rs 3,940

Resistance: Rs 4,300

DMart stock has witnessed a sharp 24.5 per cent fall from its all-time high of Rs 5,485 in late September. With the post Q2 earnings fall, the stock is now seen trading below all its key moving averages on the daily chart with the 14-day RSI around 24 levels. Given the recent sharp fall, a pullback in the DMart share price seems overdue. CLICK HERE FOR THE CHART

The weekly chart shows presence of key support around Rs 4,055 levels - its 100-WMA; below which next major support stands at Rs 3,940. In case of a pullback the stock may attempt to bounce back towards its 200-DMA, which now stands at Rs 4,530. Immediate resistance for the stock is seen at Rs 4,300 levels.

YES Bank

Current Price: Rs 21

Upside Potential: 12.9%

Support: Rs 20.30

Resistance: Rs 22

YES Bank stock is seen trading close to its 100-WMA - which stands at Rs 20.30 - a key moving average the stock has held since July 2022. On the daily scale the stock has been drifting lower ever since it broke below its 20-DMA (Daily Moving Average) in early August. The 14-day RSI for the stock now stands around 25 levels.

In case of a pullback the stock may attempt a bounce towards Rs 23.70; with interim resistance likely around Rs 22. CLICK HERE FOR THE CHART