DLF, India Cements among 7 stocks that are set to rally 10%, shows MACD

A Golden Cross, a jump in volumes when a stock crosses 200-DMA and a trend line breakout indicate strong upside for these seven stocks.

The moving averages have always helped in identifying the trend of the stocks, whether it is simple moving average (SMA) or exponential moving average (EMA). Generally, averages are plot on the price charts; however, rigorous studies have helped to discover an indicator for appropriate utilisation.

Moving average convergence divergence (MACD) uses two moving averages, 26-period exponential moving average (EMA) is subtracted from 12-period (EMA) resulting in a MACD line. To identify the potential trigger for buy and sell, a nine-period EMA is plotted on the MACD known as Signal Line. A crossover of MACD and Signal Line suggests a positive or negative trend. A positive crossover of MACD with signal line indicates upside is in place and a negative crossover defines downside. Similarly, the crossing of a zero line by MACD also suggests that the upside will continue as follow-up buying is emerging.    

There are 31 stocks in the Nifty500 index that have crossed zero line upward indicating positive trends to continue ahead. Among these DLF, Gujarat State Fertilizers & Chemicals (GSFC), India Cements, ITI Ltd, Jindal Saw, Rashtriya Chemicals & Fertilizers (RCF) and VRL Logistics seem to show strong momentum. 

DLF and India Cements have crossed 50-day moving average (DMA) and are trading with “Golden Cross” on the daily chart. GSFC and ITI are heading towards their respective resistance levels of Rs 109 and Rs 107, respectively above which a new trend will emerge. Jindal Saw has a trend line break out. RCF and VRL Logistics have crossed 200-DMA with strong volumes.

Stocks on MACD radar