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 first stock closed below 20 EMA on weekly time
frame is Nuvama Wealth
Management Ltd. The company was incorporated in 1993 and listed
under NSE in 2012.It is in the business of broking, trading in equities and a
merchant banker registered with SEBI. It was formerly known as Edelweiss
Broking.
The company has a market capitalization of ₹ 23026 crore,
Stock PE= 22.4, Dividend yield=2.27%, ROCE=20.4%, ROE=30.9%, current
stock price is ₹6380.50.See the chart below;
Our 2nd stock is Apar Industries Ltd. The company was
founded in 1958 in Gujarat by D. Desai. Leader in electrification in India and
engaged in the business of power transmission cables. It is also engaged in
manufacturing conductors, Transformer and speciality oil, and telecom
cables.
The company has a market capitalization of ₹ 31054 crore,
Stock PE= 35.2, Dividend yield= 0.66%, ROCE=32.7%, ROE=19.5%.
Current stock price is ₹ 7712.50.See the chart below;
Our third stock that has closed below 20 EMA on weekly chart is Care Ratings Ltd. This company was incorporated in
1993.It is a leading credit rating agency in India providing various ratings to
the corporates that helps them to raise capital for their needs. It has a
multiple business sections such as ratings, advisory and research, risk
solutions etc.
The company has a market capitalization of ₹ 4689 crore,
Stock PE= 33.0, Dividend yield= 1.15%, ROCE=24.6%, ROE=18.0%.
Current stock price is ₹ 1560.00.See the weekly chart of Care Ratings;
(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.
