HDFC Bank, Uflex among 5 oversold stocks you should avoid accumulating

The trend among stocks in oversold regions remains highly fragile and could see more downside ahead

The benchmark indices, BSE Sensex and Nifty 50 have breached previous reversal levels, instilling bearish sentiment and triggering further downside. The uncertainty on the street remains highly destructive impacting the psychological instincts among trading community.

In such situations, it is highly advised to avoid a few selective stocks while they trade in their respective oversold regions. Shares of HDFC Bank have broken 5-months low in the recent session, while Elgi Equipments has lost ground post striking a new all-time high. 

UFLEX and Polyplex Corporation continue to trade with frail bias since several months, even after benchmark indices showed decisive recoveries. 

Here’s the technical outlook on stocks to avoid in oversold territory:-

HDFC Bank Limited (HDFCBANK)

Outlook: Trend is fragile beneath the 200-SMA

Shares of HDFC Bank have negated the support of 200-day simple moving average (SMA) set at Rs 1,611, implying a domination of the sell-off. The stock has entered the oversold territory of RSI and looks to stay under unless a sharp up move supported by robust volume changes the stance. The overall trend appears to direct price action to Rs 1,550 – R 1,450. CLICK HERE FOR THE CHART

Blue Star Ltd (BLUESTARCO) 

Outlook: Hurdle at Rs 750

While the stock is yet to break the lower support of the consolidation established at Rs 695, the price action has fallen below the 200-SMA. The trend is weak as it enters the oversold territory, signifying a delicate breadth. The hurdle remains at Rs 750, with the price action slipping towards Rs 660-mark. CLICK HERE FOR THE CHART

Elgi Equipments Ltd (ELGIEQUIP)

Outlook: Declining towards Rs 420

Post reaching a new all-time high, the stock failed to hold the upside bias resulting in bears taking over the counter. The 200-SMA set at Rs 477 becomes the immediate hurdle, as per the daily chart. Only a decisive move above Rs 500 could recoup the positive sentiment. Trend is headed to Rs 420-mark. CLICK HERE FOR THE CHART

UFLEX Ltd (UFLEX)

Outlook: Selling pressure continues

The stock has breached all the key moving averages demonstrating weakness and its inability to overcome any selling pressure. The counter is slipping towards Rs 340 and Rs 310 level, as per the daily chart. CLICK HERE FOR THE CHART

Polyplex Corporation Ltd (POLYPLEX)

Outlook: Moving towards Rs 1,000

The failure to cross the 200-SMA in May of this year led the counter to lose the positive grip. Now, trading below Rs 1,200, its earlier support; has further dampened the bullish sentiment. Price action is deteriorating in the oversold territory. The next support is at Rs 1,000-mark. CLICK HERE FOR THE CHART