Nifty 500: 350 stocks below 200-DMA; ACC, Hero Moto, HUL new additions

Over 10 stocks slipped below their 200-DMA on Tuesday after the Nifty50 broke below its sentimentally important level of 16,400, while the Sensex lingered near 55,000-mark

As many as 368 stocks from the Nifty500 universe are witnessing bearish sentiment at the current juncture, with every upmove witnessing a selling pressure. Nearly 350 stocks are trading under their respective 200-DMA, with 14 new stocks slipping below their 200-DMAs on Tuesday, including the likes of ACC, Blue Star, Britannia Industries, Chambal Fertilizers & Chemicals, Escorts, Hero MotoCorp, Hindustan Unilever, MRF and Marico. 

The 200-day moving average (DMA) is the most acknowledged indicator used by investors and traders while taking an informed decision. Stocks trading over 200-DMA are said to rise further, as they have a bullish undertone, while those trading under 200-DMA are anticipated to see more sell-off.

The weakness in stocks comes after benchmark indices, the BSE Sensex and the Nifty50 indices, retraced back to their breakout areas with heavy sell-off on Tuesday. The Nifty50 has breached its sentimentally important level of 16,400, while the Sensex is lingering near 55,000-mark. The BSE Sensex has now shed more over 1,000 points and the Nifty50 is down almost 400 points from their recent breakout peaks. 

However, volatile global situation and monetary policy tightening by central banks may drive indices in either directions. Technically, whenever a stock violates the 200-DMA and fails to show rebound, there are high possibilities of 15-20 per cent decline or more. 

The stock enters a short-to-medium term downtrend, and unless a decisive move with robust volume or sideways consolidation emerges, the trend remains bearish. 

Table below shows the new 14 stocks under 200-DMA:

source: spidersoftware