𝗧𝗲𝗰𝗵𝗻𝗶𝗰𝗮𝗹 𝗕𝗿𝗲𝗮𝗸𝗱𝗼𝘄𝗻 𝗔𝗹𝗲𝗿𝘁: 𝟯 𝗦𝘁𝗼𝗰𝗸𝘀 𝗖𝗹𝗼𝘀𝗶𝗻𝗴 𝗕𝗲𝗹𝗼𝘄 𝟮𝟬 𝗘𝗠𝗔 𝗼𝗻 𝗪𝗲𝗲𝗸𝗹𝘆 𝗧𝗶𝗺𝗲 𝗙𝗿𝗮𝗺𝗲

  

In the dynamic world of trading, identifying early signs of trend reversal is just as important as spotting a breakout. This week, based on our technical analysis, we have shortlisted 3 stocks from the broader market that have shown signs of weakness. These stocks have closed below the 20-day Exponential Moving Average (EMA) on the weekly time frame, which often signals the beginning of a negative momentum phase.

The 20 EMA is a widely-followed short-to-medium-term trend indicator. While many traders use it on daily charts to identify immediate price direction, its application on weekly charts provides a more reliable picture of trend strength and longer-term sentiment.

When a stock closes below its 20 EMA on the weekly chart, especially after a sustained uptrend, it may indicate:

1. Exhaustion of bullish momentum

2. Onset of profit booking

3. A possible trend reversal

4. Entry into a corrective or bearish phase

Such a combination—price closing below the 20 EMA on a weekly time frame and RSI weakening below key thresholds—should be viewed as a warning sign. It doesn’t always confirm an immediate breakdown, but it raises red flags about the stock’s near-to-mid-term strength.

If you are holding positions in any of these stocks, it may be time to:

·  Review your stop-loss levels

·  Consider partial profit booking

·  Avoid initiating fresh long positions until price action stabilizes

·  Watch for further breakdown below support zones or formation of lower highs

For short sellers or traders looking for bearish opportunities, these stocks can offer setups with favorable risk-to-reward ratios, especially if the breakdown is supported by volume or broader sector weakness.

Our 1st pick is Clean Science & Technology Ltd. It is an Indian speciality chemical company incorporated in 2003.The company is a leading manufacturer of organic and inorganic chemical products. It is  a leading manufacturer of functionality critical chemical such as performance chemical such as MEHQ, AP etc., Pharmaceutical ingredients and FMCG chemicals. 

CLEAN has a market capitalization of ₹ 14013 crore, stock PE=52.2, ROCE=27.2%, ROE=20.2%, current share price is ₹1319.

See below the weekly chart of CLEAN;

    

Our 2nd pick is Shriram Finance. Shriram Transport Finance company is a NBFC company under the SHRIRAM group. It is engaged in financing to passenger vehicles loans, loans to MSME, trucks, gold loans, working capital loans etc. It's AUM is 2.6 trillion. It has a partnership with 500 companies, 1758 branches, 832 rural centers. 

The company has a market capitalization of ₹ 221403 crore, stock PE=14.8, Dividend yield=1.53%, ROCE=11.0%, ROE=15.6%, current stock price is ₹646.See the chart below;

Third and final pick is Tech Mahindra from IT sector. It's a renowned IT company providing wide range of IT services including consultancy, application development, maintenance, and IT enabled services over 22 industries in 150 companies. It is a Mahindra group of company having operations in more than 100 countries. 

It has a market capitalization of₹ 151670 crore, stock PE=33.7, Dividend yield=2.91%, ROCE=18.6%, ROE= 14.6%, current stock price is ₹1549.See the chart below;

Stop- Loss in these stocks should be one candle close above 20 EMA line or as per individual risk appetite

Disclaimer: The information provided on MoneyWiseMind is for educational and informational purposes only. It is not intended to be financial advice, and you should not rely on it as such. Before making any financial decisions, you should consult a licensed financial advisor.