Nykaa, Policybazaar, Syngene, United Spirits showing bullish reversal trend
Are there still some stocks that could be buy candidates after the swift run-up in the share prices over the last one month? If you are also grappling with this question, we bring a quick look at some stocks that could be breaking out from a momentum perspective.
Investors looking at charts and price and volume patterns have various parameters to decide whether a stock is ripe for the pick or is showing signals of weakness and is best left untouched.
We picked a metric called Williams %R, which is a momentum indicator that can signal bullish or bearish trends for a stock.
Developed by Larry Williams, Williams %R is the inverse of the Fast Stochastic Oscillator. Its reading varies between 0 and -100, with 0 to -20 indicating an overbought range and -80 to -100 being seen as an oversold zone.
We ran an exercise to see which large-cap stocks are in the bullish zone as per Williams %R. In particular, we looked at stocks with market cap of over Rs 20,000 crore, with the William %R just crossing over -80 mark from the previous score at that level. We spotted around a dozen such large caps which could be set for a trend reversal.
Broadly, this set is dominated by new age technology companies that have been battered in the recent past, industrial gas producers and consumer discretionary product makers.
Filtering them from the top end of their market cap, we get names like FSN E-Commerce Ventures (Nykaa), United Spirits, Domino’s Indian franchisee Jubilant Foodworks, drugmaker Zydus Lifesciences, Gujarat Gas, auto parts maker Minda Industries, Indraprastha Gas, Policybazaar parent PB Fintech, Thermax, GlaxoSmithKline Pharma, Syngene International and Tata Teleservices.
Lower down the order, Prestige Estates, Central Bank of India, VIP Industries, Poly Medicure, TV18 Broadcast, Zensar Technologies, Mahindra Lifespace Developers, Eveready, Mahindra Logistics, Glenmark Life Sciences, Vaibhav Global and Gujarat Pipavav Port, IIFL Securities, Hester Biosciences and Bajaj Hindusthan figure in the list.
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