These stocks priced under Rs 20 show a bullish pattern by candlestick strength

Stock markets

Indian Market
by 5paisa Research Team Last Updated: Dec 13, 2022 - 11:11 am 16.8k Views

Investors who bank on technical analysis or patterns in the price and volume movements of a stock(s) typically use candlestick charts or use it along with other parameters to predict price movements of stocks in the future.

Candlestick charts, or Japanese candlestick charts, were devised by—or are attributed to—Japanese rice trader Munehisa Honma, who made loads of money in Osaka in the 18th century.

Of course, he wouldn’t have imagined that nearly 300 years later, the candlestick charts would become the staple of studying patterns in the stock and currency market.

In simple terms, the candlestick captures the opening and closing price along with highs and lows of a stock. Analysts study patterns of these candlesticks to pick stocks.

One of the strategies that are used by technical analysts is to look at stock with good aggregate candlestick strength. This, in turn, is the value one derives from the net of bullish over bearish candlestick indicators.

If the number is in the positive quadrant and has a higher value it indicates the bullish pattern and vice versa for the number being in the negative side.

If we apply this to the broader list of stocks, we get a set of 119 companies that have a good aggregate candlestick strength of 1 or more, showing bullish trends. Most of these stocks are from the small and micro-cap list.

If we filter out companies by focusing on stocks with stock price under Rs 20 each, we get around 80 companies.

In this set, some of the companies include Eurotex Industries, Lesha Industries, Indo-Global Ent, India Cements Cap, Steel Exchange India, Toyam Industries, Indowind Energy, Super Bakers, Enterprise International, New Light Apparels, Sita Enterprises, Shalimar Wires and Ansal Properties.

A few other stocks in the pack include RLF, Yuranus Infra, Mipco Seamless Rings, Sybly Industries, Mathew Easow Research, Jhaveri Credits, BAG Films & Media, Caspian Corporate, Super Tex Industries, Janus Corporation, Stellant Securities, Oscar Global, Prism Medico, Crane Infrastructure, Howard Hotels, GSB Finance and Beryl Securities.

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