Riken Mehta
Follow me on Twitter @mehtariken
Follow me on Twitter @mehtariken
Indian stocks crashed on Friday and the hope of Nifty moving back above
its 200 day-moving-average (DMA) seems like a herculean task now. Analysts attribute
recovery in US, depreciating rupee and deteriorating earnings as the prime catalysts for this fall.
Four years back market participants rejoiced the comeback of UPA to power
in 2009. The Nifty closed at 20 percent upper circuit, option traders made huge
money and our very own renowned anchor Udayan Mukherjee kissed his computer
screen. Today, market participants
including traders, investors, brokerage houses and even common man are awaiting
the elections for change of guard in the north block.
So what lies ahead since the general elections are slated in April/May
next year? In my earlier article, I had
explained moving averages and the significance of Nifty breaching 200 DMA.
Today we will analyse the 200 DMA of Nifty constituents.
The 200 Day Moving Average is a long-term moving average
which helps in tracking the overall health of an underlying asset. A stock
trading above its 200 Day Moving Average is considered to be in a long-term
uptrend and vice-versa.
As per Friday’s closing price (August 16, 2013) 38 stocks
out of Nifty 50 are trading below their 200 DMA. What’s even worse is that out
of the remaining 12 stocks five are trading barely above their 200 DMA (within
10 percent above their 200 DMA) including defensives like ITC, Cipla and Bharti
Airtel. If one analyses the data closely, then 30 stocks are trading 10 percent
lower than their respective 200 DMA. Bajaj Auto, Cairn India and Reliance Industries
are the latest entrants to join the club of stocks below 200 DMA.
Friday’s fall was also accentuated by higher delivery based
selling compared to 8-day average in some of the high beta stocks. As per latest earnings analysis of Nifty 50 stocks, total sales growth was lowest in last 15 quarters. Personally, I
believed this reaction should have come much earlier when every macro economic
data was hitting multi-year lows and yet Nifty managed to keep its head above
the 200 DMA. Around 10-12 stocks in the Nifty were able to hold it due to their
large weight age in the Nifty but it seems that the tide has turned in favor of
bears. A big move is mostly followed by
choppiness (highly volatile intraday moves on either side) including a pullback
rally and one needs to see how long will it last.
| Company Name | Current Price | 200 Days | Below 200 DMA |
| Jaiprakash Asso | 29.7 | 73.67 | -60% |
| BHEL | 105.55 | 199.4 | -47% |
| Jindal Steel | 213.15 | 335.31 | -36% |
| PNB | 500.25 | 761.52 | -34% |
| DLF | 145.45 | 221.06 | -34% |
| Bank of Baroda | 479.25 | 709.16 | -32% |
| Tata Steel | 235.35 | 335.26 | -30% |
| IDFC | 106.75 | 151.81 | -30% |
| SBI | 1,570.60 | 2,154.70 | -27% |
| Reliance Infra | 325.4 | 427.72 | -24% |
| Larsen | 757.45 | 994.38 | -24% |
| Tata Power | 73.45 | 96.17 | -24% |
| BPCL | 290.2 | 369.27 | -21% |
| Grasim | 2,332.90 | 2,966.13 | -21% |
| Axis Bank | 1,048.95 | 1,333.55 | -21% |
| ICICI Bank | 858.6 | 1,090.17 | -21% |
| NMDC | 108.75 | 136.74 | -20% |
| Sesa Goa | 130.25 | 163.2 | -20% |
| Coal India | 258.3 | 322.57 | -20% |
| IndusInd Bank | 356.4 | 435.69 | -18% |
| Hindalco | 93.55 | 106.58 | -12% |
| Ranbaxy Labs | 379.6 | 430.37 | -12% |
| Maruti Suzuki | 1,325.10 | 1,502.19 | -12% |
| UltraTechCement | 1,684.00 | 1,908.93 | -12% |
| Power Grid Corp | 98 | 110.72 | -11% |
| HDFC Bank | 587.9 | 661.74 | -11% |
| GAIL | 298.3 | 333.89 | -11% |
| HDFC | 737.9 | 821.92 | -10% |
| ONGC | 271.8 | 302.29 | -10% |
| ACC | 1,158.90 | 1,279.02 | -9% |
| Ambuja Cements | 173.4 | 190.9 | -9% |
| Mah and Mah | 840.1 | 917.05 | -8% |
| Asian Paints | 418.7 | 455.01 | -8% |
| NTPC | 139.65 | 151.33 | -8% |
| Kotak Mahindra | 632.25 | 679.37 | -7% |
| Bajaj Auto | 1,848.35 | 1,912.27 | -3% |
| Cairn India | 301.3 | 307.11 | -2% |
| Reliance | 826.7 | 832.97 | -1% |
| ITC | 320.4 | 312.14 | 3% |
| Cipla | 414.7 | 397.48 | 4% |
| Bharti Airtel | 335.65 | 311.75 | 8% |
| Tata Motors | 313.95 | 291.34 | 8% |
| Dr Reddys Labs | 2,166.15 | 1,968.57 | 10% |
| HUL | 599 | 536.37 | 12% |
| Hero Motocorp | 1,985.35 | 1,733.44 | 15% |
| Infosys | 2,978.40 | 2,583.18 | 15% |
| Lupin | 817.55 | 679.96 | 20% |
| TCS | 1,780.90 | 1,455.33 | 22% |
| Sun Pharma | 542.45 | 434.22 | 25% |
| HCL Tech | 921 | 732.48 | 26% |
