Stock prices of 299 BSE500 companies are trading below their 200-day moving averages, which indicates a bearish trend.
They include MRF, Page Industries, Eicher Motors, Maruti Suzuki, OFSS, Britannia Industries, Bajaj Auto, Hero MotoCorp, HCL Tech, MindTree, Lupin and M&M, among others.
“Most of the companies mentioned above have reported subdued financial performance led by a slowdown or regulatory concerns in their respective sectors. The companies are fundamentally sound but are witnessing challenges currently,” Ajit Mishra, Vice President-Research, Religare Broking Ltd told Moneycontrol.
Mishra said that near term outlook for these stocks also remains subdued given the on-going economic slowdown and persistent headwinds for their respective companies.
"Hence, further correction cannot be ruled out in the given names, but it would be advisable that investors with no exposure to these companies can start accumulating in a phased manner,” he said.
The 200-DMA is a long-term trend indicator used by technical analysts to predict a stock's price direction in the future.
Table: Top 20 stocks filtered by the market price, which are trading below their 200-DMA as on July 11. They are not 'buy or sell' ideas but for reference purpose only.
Stocks trading above 200-DMA
There are as many as 200 stocks that are trading above their 200-DMAs that indicates a bullish trend. They include Shree Cements, Nestle India, Bajaj Finserv, UltraTech Cement, Bajaj Finance, DRL, HUL, Divi’s, L&T, RIL and Bata India, among others.
Despite a challenging environment, most of the above companies have delivered strong financial performance and the stocks have seen considerable up move in the past six months.
These companies have strong growth prospects and sound fundamentals and they continue to command premium valuations, said Mishra.
But, traders should not rush in to buy these stocks at current levels and instead wait for a fall of 8-10 percent before putting their money, he suggested.
Umesh Mehta, Head of Research, SAMCO Securities also said people should wait for a while before buying these stocks. “It is not the best time to get into these stocks as there is a lot of pressure currently from the macros. Investors should wait for some more time and get into these stocks only once there are signs of revival (in the economy),” he said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
