The Nifty50 flirted with its long-term moving average which is also known as 200-day moving average (DMA) in the past week but there are as many as 126 stocks in the large and midcap space with a market capitalisation of more than Rs 10,000 crore which are trading just above this crucial level as on 5th April.
When the Nifty was flirting with 200-DMA there were many stocks which were trading above this levels which include names like ABB India, ACC, Adani Enterprises, Adani Ports, Asian Paints, Axis Bank, Bajaj Auto, BHEL, Bharat Electronics, Bharti Infratel, Canara Bank, CESC, Crompton Greaves, DLF, Eicher Motors, Hero MotoCorp etc. among others.
So why is 200-DMA important for traders? Well, the 200-day simple moving average is more relevant for traders in determining the overall trend for the market. It is considered as a crucial support for the index or stocks in a falling market scenario.
However, it should not be the only filter used to select stocks to buy or sell. Investors should use other technical parameters such as MACD, RSI, Supertrend Indicator, and other momentum indicators before placing your bet.