RIL, Mphasis: 45 stocks hit fresh 52-week lows; charts show more pain ahead

The collapse of the startup focused SVB (Silicon Valley Bank) led sell-off in the global markets, including US, Europe, and Asia. Major markets have plunged over 2 per cent since the start of the current week, raising concerns about its repercussion globally. 

Domestic benchmark indices, the BSE Sensex and Nifty 50 saw fresh breakdowns on Tuesday, decisively undermining the 200-day moving average (DMA). The sentiment has become wedged, as markets are gradually declining towards November lows of last year. 

At present, the market breadth remains fragile, with over half of Nifty 500 stocks trading beneath the 200-DMA, 45 of which hit new 52-week low.

Among these 45 stocks, shares of Reliance Industries, Mphasis, Divi's Laboratories, ICICI Lombard General Insurance Company, Central Depository Services (India),  Avanti Feeds ,Laurus Labs, Muthoot Finance and TV18 Broadcast have evolved with fresh technical patterns pointing more downside. 

While on Wednesday, the BSE Sensex and Nifty 50 opened on a strong note; both benchmark indices opened 0.72 per cent higher, the sustainability and reversal signals need to cross noteworthy hurdles to restore the positive bias. Until that happens, the uncertainty will always disturb the market sentiment. 

Technically, the heavy-weight Reliance Industries has broken critical support of Rs 2,300, raising concerns about the future drawdown. In addition, the formation reveals a “Descending Triangle” violation, a bearish pattern suggesting sell-off to get triggered if the counter fails to rebound quickly. 

Cipla, another Nifty 50 constituent, has formed a “Death Cross”, leading to medium-term bearishness. The stock may see reversal, but the current candlestick formation points to a selling pressure that is projected to elevate at major barriers. Likewise, Divi's Laboratories, which is in a downtrend since the start of 2022, has not been able to maintain supportive ground. 

HDFC Life Insurance Company is witnessing volumes base selling pressure. On the other hand, the stock continues to experience low volumes on reversal or positive closes, signifying a lower level of accumulation.

Whenever the key constituents begin to lose their positive sentiment; along with market breadth slipping in bear grip, the trend shifts from robust bullishness to avoid bias. A scenario where over half of Nifty 500 stocks loses the support of the 200-DMA reflect a lack of aggression towards buying or accumulation. 

Among mid, small-cap stocks, major stocks trading below the 200-DMA are Ashok Leyland, Godrej Properties, LIC Housing Finance, Chambal Fertilizers, Delta Corp, and Hindustan Copper, all of which have failed to show reversal that could stage bullishness.

source: spidersoftwareindia.com