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 4 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 pick is Nuvama Wealth
Management Ltd. It is engaged in the business of broking and
trading in equities and also an investment advisor and Marchant Banker
registered with SEBI. It was incorporated in the year 1993.
The company has a market capitalization of ₹ 24375 crore, stock PE=
24.8,Dividend yield = 2.13%, ROCE= 20.4%, ROE=30.9%, current stock price is
₹6770.00.See the weekly chart of Novuma Wealth how the weekly candle closed
below 20 EMA line after making a bearish candle:
Our 2nd pick is Godrej Consumer Products Ltd. GCPL is an Indian
consumer goods manufacturing company with variety of products like toilet
soaps, detergents, hair colour etc. Its brands include Cinthol Soap, Godrej
No.1 soap, Godrej Rich cream, Ezee and many others which are more than 10
brands.
The company has a market capitalization of ₹ 121347 crore, stock
PE=64.0, Dividend yield=1.26%, ROCE=19.2%, ROE=15.2%, current stock price is ₹
1186.See the chart below:
Our third pick is Kalyan Jewellers India Ltd. It is engaged in
manufacturing, selling and designing of gold ornaments, studded and other
jewellery products across various price points. It is among the top 5 jewelry
company of in India based on revenue in 2020.
The company has a market capitalization of ₹ 54494 crore, stock PE=68.1,
Dividend yield=0.23%, ROCE=14.3%, ROE=15.9%, current stock price is ₹
528.10.See the weekly chart of Kalyan Jewellers below:
Our fourth pick is Mankind Pharma Ltd. It belongs to
healthcare industry, engaged in manufacturing, developing and marketing of
acute pharmaceutical formulations and chronic therapeutic medicines and many consumer
healthcare products. It was incorporated in 1995.
The company has a market capitalization of ₹ 101824 crore, stock
PE=53.9, Dividend yield=0.04%, ROCE=16.0%, ROE=14.7%, current stock price is ₹
2467.10.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.
