RSI: Stocks in overbought and oversold zones

Which offers the most profitable investing ideas in India. Paytm said that its revenue from payment services to consumers increased by 55 per cent to Rs 549 crore on year-on-year basis while payment services to merchants went up by 56 per cent to Rs 624 crore YoY. The company had posted a loss of Rs 481 crore in the same period a year ago, Paytm said in its regulatory filing. In one week, the stock has fallen 26 per cent or by Rs 165. In three months, the stock has fallen by Rs 314 or 40 per cent and in one year, the decline has been to the tune of 66 per cent or nearly Rs 900. Another indicator, MFI or Money Flow Index has ebbed to 4.7, significantly lower from a benchmark of 20 and indicates a massive selling in the counter.

  • On a rolling basis, stocks which come in top 80% of total market-cap are considered largecaps, next 15% midcaps and remaining 5% smallcaps.
  • Time period generally considered is 20 days.CCI is relatively high when prices are far above their average & relatively low when prices are far below their average.
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  • However, in the second half, it seems to have recovered and is trading above its todays open.

The OI distribution chart suggests as a stiff resistance level, while and are immediate support levels. It is a volatility indicator which indicates the degree of price volatility at an absolute level compared with its 9 SMA. If the value is greater than its 9 SMA it considered to be Highly Volatile. If the value is less than equal to its 9 SMA it is considered to be Less Volatile. It does not provide any indication of price trend. It is a momentum oscillator that takes the current price and compares it to a price “n” periods ago.

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It is believed that stocks with an RSI of 70 or above suggest overbought or overvalued conditions and probably signals a trend reversal or correction. On the flip side, an RSI of 30 or below suggests an oversold or undervalued situation. Top 10 stocks in overbought and oversold zones-Your browser does not support the audio element. It is believed that stocks with an RSI of 70 or above suggest overbought or overvalued conditions and probably signal for a trend reversal or correction. Relative Strength Index is one of the most-used technical indicators.

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The company is a recent listing on the NSE, having marked its debut on 10 December last year. Since the listing, the stock has only been seeing a southward direction. In fact, the all-time high of Star Health shares of INR 940 was on the listing day itself, meaning the stock never rose above its listing day’s high. As the downtrend continued, yesterday, the stock tanked to an all-time low of INR 469.05, depicting a massive 49.8% value erosion from the top. In the current market situation, it demands to have a more stock-specific view.

Stands for Moving Average Convergence Divergence.It is a trend following momentum indicator. For calculation three moving averages are taken which are 9 day EMA, 12 day EMA & 26 day EMA. The 26 day EMA subtracted from the 12 day EMA alongwith the 9 day EMA which is the “signal line”, together give buy/sell signals. If the MACD is above 0 and crosses above the signal line it is considered to be a bullish signal. If the MACD is below 0 and crosses below the signal line it is considered to be a bearish signal.

oversold stocks india

Readings between 45 & 55 indicate Neutral condition.Readings between 20 & 45 indicate Bearish condition.Readings below 20 indicate a security is oversold. “The past four week’s corrective phase hauled the weekly stochastic oscillator in extreme oversold territory, indicating an impending pullback,” ICICI Direct said. The brokerage firm earlier had a target of for Nifty 50. The index after hitting the same reversed lower tracking a host of negative global developments. ICICI Direct now expects the index to respect support levels and move higher in the coming months to touch 17100. It is a momentum indicator that measures the flow of money into and out of a security.

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Any breakout above or below the bands is a major event. “Along with RSI, the common indicator would be a moving average with lesser time periodicity.” The sell-off in the past 10 days has resulted in key near-term supports for the Nifty, such as its 20 and 50-day moving averages, getting broken. RSI for the Nifty is placed at 28 levels, which is below the one-year lower band. The market has witnessed a sharp bounce from this oversold levels in the past year during the bottom dates such as March 7, December 21, 2021, and November 29, 2021.

oversold stocks india

(Total m-cap classification is done on a daily basis). In fact, in the first half, it shed almost 166 points or 0.91%. However, in the second half, it seems to have recovered and is trading above its todays open. Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news. Analysts are advising that dips should be attributed to construct a portfolio by accumulating quality stocks in a staggered manner as they expect the Nifty 50 index to hold a key support threshold of 15600.

This JhunJhunwala Stock is Reversing From Oversold Zone!

However, checking the momentum indicator would definitely help you screen stocks. One of the most popular momentum indicators is the Relative Strength Index . If we look at the derivative data, then a put/call ratio of 0.72 is showing an oversold reading, while FIIs are biased on the short side with 56% short positions in the index futures.

RSI reading greater than 75 is interpreted as an overbought. Technically, Nifty has surrendered its 50-DMA and 100-DMA effortlessly. On the upside, the 18000–18100 area will act as a supply zone, and Nifty has to cross its 50-DMA of for any meaningful strength. On the downside, 17640, 17565, and will be the next important support levels. Approximately 90% of price action occurs between the two bands.

Investors like to look for stocks that have attracted too much attention in the market. These stocks have been sold to the extent that sellers are increasingly scarce. The implication is that these stocks are likely to rebound. Brokerage ICICI Securities said the share buyback was a positive development with the buyback being one of the methods to use surplus cash on company’s books amid limited capex spends. The big bull Rakesh Jhunjhunwala might finally see some relief in one of his stock holdings which has performed horrible bad in the last few weeks. Although most of the mid-caps have corrected this year from their recent highs, some stocks have severely underperformed their benchmark index, tanking to all-time lows.

With the help of relative strength index , we take a look at top stocks that are oversold at current levels. ICICI Direct is expecting bank stocks to outperform along with PSU Stocks. “PSU index has seen improvement in both momentum and relative term, we expect the PSU stocks to continue with their relative outperformance,” they said. IT stocks have corrected and are now placed near support levels, hinting at a favourable risk-reward setup. Analysts said RSI of these 60 stocks has fallen below 30 – an oversold condition.

oversold stocks india

Here we would be listing stocks having RSI in overbought and oversold zones. Dow Jones and the NASDAQ index are down 14% and 28% in the current corrective phase, which has propelled ICICI Direct to expect both indices to stage a bounce from oversold territory. “Over the past two decades, in a secular bull market, barring two instances, average intermediate correction in Dow Jones, Nasdaq indices have been around 15% and 25%, respectively. Buying in such corrections have provided decent returns to investors from a medium-term perspective,” ICICI Direct said.

Pivot levels

While the jury is out whether the markets have bottomed out, analysts said valuations of some of these stocks have turned cheaper after the recent correction. But remember, like most investing tools, the RSI has its limitations. So you should combine RSI with other indicators to get a better picture. Even in a bull market, there are certain stocks which go out of favour and underperform their peers. Here’s a look at what analysts said about the prospects of the stock and is it a good buy in the current market position.

Historical data also shows that in the last 3 cycles of Fed rate hike, despite the initial knee jerk reaction post interest rate hike US markets have rallied over the medium-term. During the oversold stocks india same phase, Indian equities remained in a positive trend in tandem with the US markets. Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India.