BAJAJ FINANCE DETAILED MACD ANALYSIS!! DISCOUNTED NIFTY 50 STOCKin this idea i will be explaining you the MACD analysis done by me. but firstly let me run you through the chart.
THE TREND LINES:
RED LINE: its the trend followed from past several years before the 2020 crash.
DARK BLACK LINE: it is drawn out from the market getting consolidated and from the bull rally post the corona's crash. its the actually trend which should be followed by the stock at present. this helps to determine how much is the stock discounted by.
BLUE LINE: this are the short term resistence followed by the stock.
EXPLAINING THE MACD ANALYSIS:
THE DARK GREEN sticks represents a bull momentum
THE LIGHT GREEN sticks represents the stock correcting, after having several dark green sticks
THE DARK RED sticks represents a bear momentum
THE LIGHT RED sticks represents the stock having an impulse move after the correction, and coming back to its original trend.
MACD ANALYSIS DONE IN DETAIL:
i have wrote down some numbers on MACD explaining my analysis(be with me till the end).
based on the numbers i will be writing the points:
NUMBER 1 REPRESENTS: the macd being always been in the green stick(light and dark), representing having a bull rally and a correction after it, but staying within the trend.
NUMBER 2&3 REPRESENTS: the 3 dark red sticks, showing the 2020 crash. now, since it has to be valued right, the minor red sticks showed an upward momentum to bring the stock again in its original trend.
NUMBER 4&5&6 REPRESENTS: the bull rally post the crash, and the correction followed by it. NUMBER 6 is also a major correction because of MAJOR FII STAKES SELLING.
NUMBER 7 REPRESENTS: a small momentum gained by stock after NIFTY 50 finished correcting, and had a bull rally(dated- 20th of June). and even including the stock split news. but this smal momentum had broken the blue trend line, showing a breakout, and a bullish sign. but from past 3-4 months the stock is following lower highs pattern, and it has sent to its previous red line trend. some possible reasons could be said, one of such could be current market conditions.
THE CIRCLED PART(in macd): but finally a red stick shown, had made me to think that instead of breaking the lower highs pattern, the stock is falling majorly, and reaching its greatest support of trend line(6560).
(average macd been followed by the stock was 90, and post corona it should be around 110.)
RSI:
the overall rsi indicator is slowly falling, showing that stock may not be moving as it was moving much before. but this can only be conformed seeing the sector growth.
WHAT AM I DOING: i will wait till the stock reaches bottom, and then start keeping a keen eye on its price movements, if its starts going up, i will make 3 positions 6560, 7300 and 8150(based on the patterns and trends). if falls, then cant tell, but one could then tell the stock is much undervalued. but this will pretty much not happen because NIFTY FIN SERV index, to needs to go up for a long. and same is for this stock.
THANK YOU FOR STAYING TILL LAST. I HOPE YOU LIKED MY ANALYSIS:)
