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
Our 1st stock this time is Poonawalla Fincorp Ltd. It is engaged in
the business of consumer and MSME financing and general insurances also. It is
a non- deposit taking NBFC registered under Reserve Bank of India. The company
offers pre- owned car finance, business loans, personal loans, loans against
property, and various other loans.
As of now, Cyrus Poonawalla group holds a maximum 62% stake in the
company. Group head is Rising Sun Holdings Private Limited.
The company has a market capitalization of ₹ 31964 crore, stock PE=Nil,
RoCE=4.77%, ROE=-1.28%, current stock price is ₹ 413.30.See the chart below:
Our 2nd pick is Adani Energy Solutions
Ltd., is a multidimensional organization part of Adani
group of companies. It is the largest private power transmission company of
India. It has dominance I energy sector engaged in transmission, distribution,
cooling solutions, smart metering etc.
The company has a market capitalization of₹ 99142 crore, stock PE= 41.4,
Dividend yield=0.00%, ROCE=10.2%, ROE=12.8%, current stock price is ₹ 817.15. See
the weekly chart of AESL below;
Our third pick is KFIN Technologies Ltd. It's a technology
driven financial services platform providing services and solutions to asset
management companies catering to the capita market ecosystem in India and
abroad. It provides solutions including transactions origination and various
processing practices in Malaysia, Hongkong, and Philippines.
The company has a market capitalization of ₹ 20179 crore, stock PE=
59.0, Dividend yield=0.48, ROCE=36.2%, ROE=26.1%, current stock price is ₹
1162.See the chart below:
(Stop- Loss in these stocks should be one candle close below 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.
