These 20 small-cap stocks appear overbought on the charts. Trade cautiously
Out of these 20 counters, only 4 stocks are showing weakness in the overbought condition and can correct in the days ahead.
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The overbought condition on any technical parameter hints at the possibility of a correction going ahead. Hence, It is advisable to book profit and buy again at lower levels, if the technical and fundamentals of the company remain robust.
Despite being in the overbought terrain, there could be a few stocks that continue to hold positive strength if the fundamentals of the company are robust and there is a genuine demand for its stock as indicated by the trading volume. Typically, these stocks manage to absorb all the selling pressure without any major correction. Such stocks are expected to breakout on higher levels with market participants taking a greater interest. As a result, they can even cross their previous 52-week / monthly / yearly and all-time high levels.
In addition, there are stocks which have built active scenario on the volume or could be on other aspects such as chart patterns, support-resistance, moving averages, etc
A quick run on the data suggests that there are 20 stocks in Nifty Smallcap 100 Free index that are trading in the overbought zone of Relative Strength Index (RSI), Stochastic and the Money Flow Index (MFI). All these indicators mainly identify price actions based on their relevant signals. RSI studies the strength of the stock, the Stochastic compares price position and MFI analyses the volume along with the stock price.
Out of these 20 counters, only 4 stocks are showing weakness in the overbought condition and can correct in the days ahead. This list includes CSB Bank Limited, TV18 Broadcast Limited, Kaveri Seed Company Limited and Shilpa Medicare Limited.
Here's is the lists of bullish stocks in the overbought territory:-
Despite being in the overbought terrain, there could be a few stocks that continue to hold positive strength if the fundamentals of the company are robust and there is a genuine demand for its stock as indicated by the trading volume. Typically, these stocks manage to absorb all the selling pressure without any major correction. Such stocks are expected to breakout on higher levels with market participants taking a greater interest. As a result, they can even cross their previous 52-week / monthly / yearly and all-time high levels.
In addition, there are stocks which have built active scenario on the volume or could be on other aspects such as chart patterns, support-resistance, moving averages, etc
A quick run on the data suggests that there are 20 stocks in Nifty Smallcap 100 Free index that are trading in the overbought zone of Relative Strength Index (RSI), Stochastic and the Money Flow Index (MFI). All these indicators mainly identify price actions based on their relevant signals. RSI studies the strength of the stock, the Stochastic compares price position and MFI analyses the volume along with the stock price.
Out of these 20 counters, only 4 stocks are showing weakness in the overbought condition and can correct in the days ahead. This list includes CSB Bank Limited, TV18 Broadcast Limited, Kaveri Seed Company Limited and Shilpa Medicare Limited.
Here's is the lists of bullish stocks in the overbought territory:-
source: spidersoftwareindia.com