These Stocks Are Trading Below Crucial Technical Levels

Posted Date: April 13 2021

Aavas Financiers Stock

Aavas Financiers has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 72. The stock is up 68.2% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a good run in the last 22 weeks post its break out from a 10-week, 18% deep [Cup With Handle Base]. The stock has gained 41% from the ideal buy point of INR 1540.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

This week, Aavas Financiers stock sliced through the 10-week moving average line. The stock is down -6.7% on 3% higher volume than the 10-week average. The current price is -4.8% below the 10-week moving average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 25.3% above the 40-week moving average.

 

It is not unusual for a leading stock to take support near its 10-week moving average. But if a stock closes below the line on heavy volume, the selling is not just a normal reaction. That usually indicates that the run might be coming to an end, at least for the intermediate term. The stock could certainly take support or rebound from the 10-week line, but all that is hypothetical. At this point, you can take at least partial profit.

 

Dalmia Bharat Stock

 

Dalmia Bharat has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 87. The stock is up 173.9% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a monster run post its break out from a 9-week, 21% deep Consolidation.  The stock has gained 79% from the ideal buy point of INR 825 in just 26 weeks.

 

Dalmia Bharat stock fell -4.9% this week, undercutting its 10-week moving average. It closed -1.8% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 39.2% above the 40-week moving average.

 

The leading stocks often take support near its 10-week moving average. But if a stock closes below the line, that should be considered as an early sign of weakness. Closing below the line on a lower volume is okay, but staying there is not. At this point, you can monitor the stock carefully for signs of further weakness.

 

Ultratech Cement Stock

 

Ultratech Cement has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 73. The stock is up 84.2% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a monster run post its break out from a 9-week, 12% deep Flat Base.  The stock has gained 52% from the ideal buy point of INR 4287 in just 27 weeks.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

Ultratech Cement stock fell -4.6% this week, undercutting its 10-week moving average. It closed -1.1% below the 10-week moving average. However, the volume for the week remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 27.3% above the 40-week moving average.

 

The leading stocks often take support near its 10-week moving average. But if a stock closes below the line, that should be considered as an early sign of weakness. Closing below the line on a lower volume is okay, but staying there is not. At this point, you can monitor the stock carefully for signs of further weakness.

 

Sundaram Fasteners Stock

 

Sundaram Fasteners has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 83. The stock is up 114.7% from a year ago as compared to 54% for the Nifty500.

 

Most recently, the stock broke out of a 6-week, 13% deep Flat Base 10 weeks ago. The stock has gained a reasonable 19% from the ideal buy point of INR 586.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

Sundaram Fasteners stock fell -4.6% this week, undercutting its 10-week moving average. It closed -3.2% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 29.6% above the 40-week moving average.

 

In a strong market, the 10-week moving average, can act as a support level for the stock. But, it can also act as a resistance level during a downtrend. At this point, if you do not have enough profit on the position, from a risk management standpoint, you may want to cut the position. If you have enough profit, you can monitor the stock carefully for signs of further weakness.

 

Tata Motors Ltd. Stock

 

Tata Motors Ltd. has been a roaring outperformer as compared to the broader market. It has a top-notch Relative Strength Rating of 92. The stock is up 252.2% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a monster run post its break out from a 8-week, 21% deep Consolidation.  The stock has gained 87% from the ideal buy point of INR 68 in just 21 weeks.

 

Tata Motors Ltd. stock fell -7.6% this week, undercutting its 10-week moving average. It closed -3.3% below the 10-week moving average. However, the volume for the week remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 53.1% above the 40-week moving average.

 

The leading stocks often take support near its 10-week moving average. But if a stock closes below the line, that should be considered as an early sign of weakness. Closing below the line on a lower volume is okay, but staying there is not. At this point, you can monitor the stock carefully for signs of further weakness.

 

Escorts Ltd. Stock

 

Escorts Ltd. has had a huge run in the last one year. It is up more than 63% from a year ago as compared to 54% for the Nifty500.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

On the earnings front, Escorts Ltd. has an excellent EPS Rank of 98, which indicates consistency in earnings. The earnings and sales for the stock have grown by 21% and 21%, respectively over the past three years. Its 3-years earnings stability is 8, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 56% and 18%, respectively. The 5-years earnings stability is 27. The return on equity for the last reported year is 15%.

 

Escorts Ltd. stock fell -4.1% this week, undercutting its 40-week moving average. It closed -3.9% below the 40-week moving average. However, the volume for the week so far remained below its 10-week average.

 

Escorts Ltd. has a strong earnings profile with other positives. Also, the long term trend in the monthly chart is still in uptrend. For a long term leader, the 40-week moving average could certainly act as a support level and it could set up a new base around the line. But keep in mind that such base building may take months, even years.

 

At this point, based on your profit cushion, you can either take at least partial profits or watch carefully for signs of further weakness. You can also use the 24-months simple moving average and the long term trend of the RS Line as an ultimate support for a long term leader.

 

Cummins India Stock

 

Cummins India has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 85. The stock is up 102.6% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a monster run post its break out from a 8-week, 14% deep Flat Base.  The stock has gained 66% from the ideal buy point of INR 494 in just 21 weeks.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

Cummins India stock fell -6% this week, undercutting its 10-week moving average. It closed -2.6% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 38% above the 40-week moving average.

 

The leading stocks often take support near its 10-week moving average. But if a stock closes below the line, that should be considered as an early sign of weakness. Closing below the line on a lower volume is okay, but staying there is not. At this point, you can monitor the stock carefully for signs of further weakness.

 

Container Corp Stock

 

Container Corp stock has broken out of a 27-week, 26% deep [Cup With Handle Base] 11 weeks ago. The stock has gained a reasonable 25% from the ideal buy point of INR 451.

 

Container Corp stock fell -3.8% this week, undercutting its 10-week moving average. It closed -1.6% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 25.8% above the 40-week moving average.

 

In a strong market, the 10-week moving average, can act as a support level for the stock. But, it can also act as a resistance level during a downtrend. At this point, if you do not have enough profit on the position, from a risk management standpoint, you may want to cut the position. If you have enough profit, you can monitor the stock carefully for signs of further weakness.

 

Amber Enterprises Stock

 

Amber Enterprises has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 86. The stock is up 171.6% from a year ago as compared to 54% for the Nifty500.

 

Most recently, the stock broke out of a 10-week, 18% deep Consolidation 14 weeks ago. The stock has gained a reasonable 23% from the ideal buy point of INR 2544.

 

Amber Enterprises stock fell -3.9% this week, undercutting its 10-week moving average. It closed -3.3% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 30.5% above the 40-week moving average.

 

In a strong market, the 10-week moving average, can act as a support level for the stock. But, it can also act as a resistance level during a downtrend. At this point, if you do not have enough profit on the position, from a risk management standpoint, you may want to cut the position. If you have enough profit, you can monitor the stock carefully for signs of further weakness.

 

Vedanta Stock

 

Vedanta has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 86. The stock is up 153.5% from a year ago as compared to 54% for the Nifty500.

 

The stock has had a monster run post its break out from a 9-week, 36% deep [Cup Without Handle Base].  The stock has gained 51% from the ideal buy point of INR 142 in just 18 weeks.

 

Vedanta stock fell -7.8% this week, undercutting its 10-week moving average. It closed -0.7% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 39.7% above the 40-week moving average.

 

The leading stocks often take support near its 10-week moving average. But if a stock closes below the line, that should be considered as an early sign of weakness. Closing below the line on a lower volume is okay, but staying there is not. At this point, you can monitor the stock carefully for signs of further weakness.

 

Nilkamal Ltd. Stock

 

Nilkamal Ltd. has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 72. The stock is up 75.6% from a year ago as compared to 54% for the Nifty500.

 

Most recently, the stock broke out of a 5-week, 12% deep Flat Base 3 weeks ago. However, the stock failed to make a meaningful progress.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

Nilkamal Ltd. stock fell -5.2% this week, undercutting its 10-week moving average. It closed -0.9% below the 10-week moving average. However, the volume for the week so far remained below its 10-week average.

 

The long term support line, 40-week moving average is still in uptrend. The stock is trading around 25.8% above the 40-week moving average.

 

In a strong market, the 10-week moving average, can act as a support level for the stock. But, it can also act as a resistance level during a downtrend. At this point, if you do not have enough profit on the position, from a risk management standpoint, you may want to cut the position. If you have enough profit, you can monitor the stock carefully for signs of further weakness.

 

Indian Hotels Co Stock

 

Indian Hotels Co has been a laggard stock for the last one year. It has had a 29.9% move as compared to 54% for the Nifty500.

 

The stock definitely has strong institutional support. It has seen huge institutional accumulation in the most recent quarters. The number of institutional sponsors and shares held by the sponsors, both increased in the last reported quarter.

 

Indian Hotels Co stock fell -5.5% this week, undercutting its 40-week moving average. It closed -4% below the 40-week moving average. However, the volume for the week so far remained below its 10-week average.

 

When a stock closes below its 40-week moving average, it may take months, even years to stage a recovery. So, a closing below the line should be considered as a weakness in a stock, at least for the intermediate term. If it is a long term leader, we manage it differently.

 

At this point, Indian Hotels Co does not meet our long term leader’s trend criteria. If you do not have enough profit on the position, from a risk management standpoint, you may want to cut the position. If you are sitting on a profit, this is a time to take at least partial profit.

What do you think? Please email us any questions or comments.

Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.
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