Check out the stocks showing bearish signs with a ‘bald head’

by 5paisa Research Team Last Updated: 2022-06-15T14:51:39+05:30

The Indian stock market sank last week and is now witnessing a consolidation around 15% below its all-time peak. On the one hand, higher-than-expected interest rate hikes by the US Federal Reserve and the Reserve Bank of India is playing out in the mind of investors while on the other, high oil prices due to the Russia-Ukraine war is increasing the cost pressures on companies.

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.

One such parameter is ‘black marubozu’, which means black bald head in Japanese. This is a one-day bearish pattern with a long black with little to no shadows. The pattern shows that sellers controlled the trading day from open to close. It signals a bearish pattern overall.

If we use this parameter and pick stocks from Nifty 500, we get nine companies. These include Dixon Technologies, Mastek, Indigo Paints, Metropolis Healthcare, Thyrocare Technologies, Hindalco Industries, Indian Oil Corporation, Dhani Services and Ircon International.

Other significant names in this list include Eureka Forbes, Meghmani Finechem, ISGEC Heavy Engineering, Tega Industries, Nilkamal, Orient Cement, Dish TV India, Safari Industries, Balmer Lawrie, GTPL Hathway and Accelya Solutions.

Further down, in the bracket of stocks with market cap in the Rs 100-500 crore range, there are about two dozen companies that display this signal. These include Wim Plast, Rubfila, Silver Touch Tech, Banswara Syntex, Gokul Refoils, Sika Interplant, Asian Hotels (East), Ceinsys Tech, Neelamalai Agro, MK Exim, and VIP Clothing.

This list also includes Pashupati Cotspin, Veto Switchgears, Caprihans, Lakshmi Electrical, Aarvi Encon, Sayaji Industries, Paul Merchants, Omax Autos, Shiva Global Agro, FAZE THREE Autofab and James Warren Tea.

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