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
This week our first pick is UPL Ltd. It has a Market capitalization of ₹ 49907 crore, current market price is ₹ 665.15 (5.49% down). It made a high of ₹ 758 and low of ₹ 635 in this week.
We can see from the below weekly chart of UPL that a big bearish engulfing candle is formed this week and it gave a weekly closing below 20 EMA both of which are big bearish signals. RDI is also broke 60 and going downward. Keep on radar for downside.
Our 2nd pick is Bajaj Finance. It has a market capitalization of ₹ 544 123 crore. Current market price is ₹ 875.60, made a high of ₹ 915 and a low of ₹ 866 during this week.
This week, the stock finally closed below 20 EMA making a big red candle indicating down side move to continue further. RSI is also going downward and now is below 50, indicating weakness in the stock momentum. See below the weekly chart of Bajaj Finance.
Our third pick is IIFL Finance. The market capitalization of IIFL is ₹ 18153 crore. Current market price is ₹ 427.20, this week high made ₹ 522 and low made ₹ 418.
From the weekly chart of the stock, we can clearly see that this week IIFL made big bearish candle which has finally closed below the 20 EMA line and engulfed last 6 weeks candles which is a great bearishness witnessed in the stock. RSI is also below 50 indicating weak momentum in the stock. Keep on radar for downside. See below the chart:
(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.
