More than 270 of BSE 500 stocks are still trading below the 200-day moving average (DMA), even as the benchmark indices rose 10 per cent so far in 2019.According to analysts, stocks struggling to cross their 200 DMAs suggest that the broader market is weak despite gains made by the benchmark index.
“Many small- and mid-caps have underperformed large-caps over the past several quarters, and there have been solid reasons for the same including corporate governance issues and liquidity squeeze,” said Deepak Jasani of HDFC Securities. Further, analysts said that a broad-based rally is unlikely unless issues related to liquidity are resolved and there is an earnings revival. Among individual stocks, HEG, Navkar Corporation, and Sunpharma Advanced research are trading more than 40 per cent below their 200-DMA.
Meanwhile, stocks like SpiceJet, Maharashtra Scooters and Justdial have stayed above their 200-DMAs. Spicejet is trading 57 per cent higher, while Maharashtra Scooter is trading 45 per cent higher. A third of the top-500 stocks are trading more than 10 per cent below their 200 DMAs.