Check out the stocks in the bearish zone on William %R chart
The Indian stock market is consolidating after regaining part of the lost momentum in the bloodbath earlier this month that took the indices around 15% below their peak in January.
Even as the spectre of a sharp rise in oil prices due to the Russia-Ukraine war remains a factor to watch out for, bulls have been trying to slowly push back share prices from what they believe was an oversold zone.
The benchmark indices are now just 5% shy of their all-time peak. While many market pundits are seeing a bottom for the slide in prices, few consider this as a ‘dead cat bounce’ that may give a false comfort level for investors to pump in cash.
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 seen as an oversold zone.
If we consider the pack of large caps with a market value of over Rs 20,000 crore and showing a bearish trend with latest William %R being lower than the previous level, we get a list of around a dozen stocks that have crossed the -20 level which is lower than the previous mark.
These include state-controlled power generation major NTPC, Divi’s Labs, ICICI Prudential Life, UPL, PI Industries, Biocon, SAIL, Concor, Polycab India, Deepak Nitrite, PFC, Zee Entertainment, CG Power and Vinati Organics.
Moving to the mid-cap space, we have LIC Housing Finance, PVR, Shriram City Union Finance, Poly Medicure, Granules, MCX, Rain Industries, Triveni Turbine, JM Financial, Cera Sanitaryware, Rites and CCL Products.
In the set of companies with market cap of less than Rs 5,000 crore, stocks with William %R bearish zone include Minda Corp, Mahindra Holidays, Suprajeet Engineering, Strides Pharma and DCB Bank.
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