Half of Nifty 50 stocks yet to reclaim Budget peaks, breadth stays fragile

Selective stocks like Bharat Petroleum Corporation, Divi's Laboratories, Hindalco Industries, Hero MotoCorp and State Bank of India, the technical charts are reflecting clear weakness.

Despite the benchmark index, Nifty 50 succeeds in conquering the Budget 2023 high on Wednesday; nearly half of its constituents failed to reach their respective peaks. In total, 23 stocks out of 50 have lagged in recouping their budget day highs. 

On Febuary 1st, the Nifty 50 index hit an intraday high of 17,972.20 level, which it struggled to cross since then. It took 10 sessions to claim the lost territory. 

The lists of 23 stocks include well-known names like Bharat Petroleum Corporation, Coal India, Divi's Laboratories, Eicher Motors, Housing Development Finance Corporation, Maruti Suzuki India, Adani Enterprises and Adani Ports and Special Economic Zone.

Adani Enterprise shares traded 41 per cent lower, while Divi's Laboratories traded 18 per cent down from Budget highs. Shares of HDFC Life Insurance Company, Tata Steel, Adani Ports and Special Economic Zone and Hindalco Industries stood close to 11 per cent each away from their respective peaks. Hero MotoCorp on Tuesday still trades 9 per cent from its budget peak. 

Technically, when half of the constituents are not supportive of the rally, the trend may not bear the critical strength to proclaim higher highs. Barring Adani group stocks, which tumbled on the reports of Hindenburg, 7 other stocks traded 4 per lower. 

Whenever the benchmark indices reach a crucial level, its leading constituents must already have claimed higher peaks, suggesting underlying momentum has started building a directional bias. When they lag, the trend may not take a steady route and possibility of failing the directional move appears higher. In such scenario, the overall sentiment may reflect a shift until the volatility remains low. 

On selective stocks like Bharat Petroleum Corporation, Divi's Laboratories, Hindalco Industries, Hero MotoCorp, NTPC, State Bank of India, Sun Pharmaceutical Industries and Tata Steel, the technical charts are reflecting clear weakness. The present candlestick formations are not equipped to absorb selling pressure emerging at their immediate hurdles. 

On Thursday, while ICICI Bank and UPL, managed to reach their Budget highs, other 21 stocks are not showing any exciting chart structures, even after Nifty 50 opened gap-up, with over 0.50 per cent gain. 

Here's the lists of stocks still far from reclaiming their lost territories:-

Source: spidersoftwareindia