Warning sign: Moving averages of these 2 stocks flag 'Death Cross'
Technical ALERT: A 'Death Cross' pattern is seen on the Ashapura Minechem and DCB Bank charts today, August 29.
 "Warning sign: Moving averages of these 2 stocks flag 'Death Cross'")
The BSE Sensex and the NSE Nifty rallied to hit new life-time highs in trades on Thursday, with the latter up for the 11th straight trading day. As of 1:30 PM, the Sensex had scaled a new summit at 82,221 and the Nifty at 25,175.
Amid this bull-run, 2 stocks on the NSE have signalled a likely bearish trend owing to formation of 'Death Cross' pattern on the daily chart.
Technically in a 'Death Cross' pattern, the shorter-term moving average is seen dropping below longer-term moving average; i.e. the 50-DMA (Daily Moving Average) falls below the 200-DMA. Since, the shorter-term moving average quotes below the longer-term moving average; this particular trend is termed as 'bearish' in the market.
Here are 2 stocks that have witnessed this 'Death Cross' pattern on the daily chart today on August 29.
Ashapura Minechem
Current Price: Rs 346
Downside Risk: 28.3%
Support: Rs 342; Rs 322; Rs 312
Resistance: Rs 361; Rs 373; Rs 420
Ashapura Minechem stock is seeing the 'Death Cross' pattern for the second time in little more than 3 months. Earlier on May 23, too, the stock had flagged 'Death Cross' on the daily chart, but thereafter dismantled it following the 'Golden Cross' on July 05. CLICK HERE FOR THE CHART
However, given the significance of chart pattern, there lies a threat of fresh decline at the counter. As such, the support at Rs 312 shall be closely tracked; below which some support is seen at Rs 293. Break and consistent trade below the same can trigger a slide towards Rs 248 with interim support seen at Rs 275. Near support for the stock is seen at Rs 342 - its 20-DMA (Daily Moving Average) and Rs 322.
On the upside, the stock is expected to face resistance around its 100-DMA at Rs 361 followed by Rs 373 and Rs 420.
DCB Bank
Current Price: Rs 122
Downside Risk: 12.3%
Support: Rs 121; Rs 116
Resistance: Rs 126; Rs 130
DCB Bank stock is seen struggling below its super trend line on the daily scale. The super trend line at Rs 126 and the 200-DMA at Rs 130 are likely to act as key hurdles for the stock going ahead. CLICK HERE FOR THE CHART
On the downside, the stock has near support at Rs 121. The medium-term chart suggests that DCB Bank could test its 200-WMA (Weekly Moving Average) at Rs 107 on the downside, with interim support seen at Rs 116.