Negative Breakdown: These stocks have slipped below the second support level


by 5paisa Research Team Last Updated: Jan 11, 2022, 03:13 PM IST

The Indian stock markets have begun the new year with a bang with a reversal of the recent correction that shaved off nearly a tenth of its value from its peak in October. Though many stocks have retained their investment flavour, some have now settled at a lower level while a few are sinking further as the liquidity overflow recedes.

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 of the simpler technical marks to pick or move away from a stock is to see which ones are moving below their first support level. This level is based on the principle of pivot points. This, in turn, is calculated from the high, low and closing share price of the previous day, as an average of the three.

Once we have a pivot price point, we can use that to derive resistance and support price levels. Resistance levels are higher bars from the pivot points and if a stock crosses a resistance level it could be poised for an upward movement. On the flip side, if the pivot point slides below the support level it could sink further.

Resistance levels are by default above the pivot point while support levels are below it.

Traders also have different resistance and support levels These are stepped up or down levels of the same principle so a stock would have R1, R2 and R3 levels to depict resistance and S1, S2 and S3 levels for support.

Last week, we conducted an exercise to find out which stocks have moved below their S1, or their first support level.

We have now run an exercise to see which stocks have moved below their S2, or their second support level, and could be set for a further slide.

The list of stocks whose pivot point has slipped past the second support level even as indices are again near all-time highs include several drugmakers. These are Abbott India, Torrent Pharma, Lupin, Eris Lifesciences, Glenmark, Cadila Healthcare and Kwality Pharma.

Several auto component makers and engineering companies are also part of the list. These are Minda Industries, The Anup Engineering, Rane Holdings, GKW and Mahindra CIE.

Among others, there are companies such as Ami Organics, Dabur, Brigade Enterprises, Anthony Waste Handling, Aegis Logistics, and Quick Heal Technologies.

SENSEX
52,792.23
-1,416.30 (-2.61%)
Nifty 50
15,809.40
-430.90 (-2.65%)
Nifty Bank
33,315.65
-848.05 (-2.48%)
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SENSEX
52,792.23
-1,416.30 (-2.61%)
Nifty 50
15,809.40
-430.90 (-2.65%)
Nifty Bank
33,315.65
-848.05 (-2.48%)

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