The benchmark Nifty 50 index has started to show some signs of weakness. After 4 trading sessions, today was the first one when the index was not able to break the previous day’s high and adding to that, the index didn’t just break the previous day’s low but also closed below it. As the index is probably looking for a correction, some specific stocks are already in the bears’ grip. If the Nifty 50 falls from here, these stocks are more likely to underperform the broader markets.
India Cements Limited
India Cements Ltd. (NS:ICMN) is a small-cap cement manufacturer with a market capitalization of INR 7,532 crores. The stock fell over 3% in today’s session and ended the day at INR 235.6, breaking below important trendline support. This is a very short-term trendline but clearly indicates that the downward direction of the stock has resumed.
Image Description: Daily chart of India Cements
Image Source: Investing.com
In the spot market, there is support around INR 225 which seems quite strong, as of now. Therefore a fall to this level could be expected but breaking this demand zone would require intense selling from the bears.
Ashok Leyland Limited
Ashok Leyland Ltd. (NS:ASOK) is another counter that is looking quite weak on the charts. The company is a commercial vehicle manufacturer with a market capitalization of INR 43,454 crores. For the last few sessions, the stock had been consolidating in a range, forming a converging triangle pattern on the daily chart
Image Description: Daily chart of Ashok Leyland
Image Source: Investing.com
Today, the stock fell 2.2% to INR 144.75 and closed below the lower support of the triangle which is painting a bearish picture. The next demand zone is around INR 140, from where the stock had taken support multiple times, which should ideally be the nearest level on the target of the bears.
PVR Limited
Another laggard that just sliced through the lower trendline support is a theatre chain - PVR Ltd (NS:PVRL), having a market capitalization of INR 10,866 crores. After a sharp plunge, the stock had been retracing on the upside as a counter-trend rally, since the beginning of October 2022. The entire up move was supported by trendline support which got breached yesterday and a follow-up move was seen today
Image Description: Daily chart of PVR
Image Source: Investing.com
As long as the stock is trading below this, a downward bias should be maintained. The next level of around INR 1,660 - INR 1,640 should be watched carefully as buyers might not come in to support the price before this price zone.