Peeling Back the Layers on Shares of Bhagyanagar India Limited (BHAGYANGR.NS)

Chartists are paying particular close attention to shares of Bhagyanagar India Limited (BHAGYANGR.NS) as the equity has touched the near-term bottom Bollinger Band, touching 27.55 on a recent trade.  Using this along with several other technical indicators can help investors understand if the shares will continue the downward momentum or bounce back up from the band. 

Bollinger Bands are a technical analysis tool, specifically they are a type of trading band or envelope. Trading bands and envelopes serve the same purpose, they provide relative definitions of high and low that can be used to create rigorous trading approaches, in pattern recognition, and for much more. Bands are usually thought of as employing a measure of central tendency as a base such as a moving average, whereas envelopes encompass the price structure without a clearly defined central focus, perhaps by reference to highs and lows, or via cyclic analysis. We’ll use the term trading bands to refer to any set of curves that market technicians use to define high or low on a relative basis.

As a market becomes volatile, its Bollinger bands will expand (referred to as expansion); as it flattens out they will contract (contraction). In this way, they enable traders to see beyond short-term volatility and gain insight into longer price movements.

The use of Bollinger bands can also indicate whether a market is heading into overbought or oversold territory. When a market’s price continually moves outside the upper parameters of a Bollinger band, it can be considered to be overbought, and when it moves below the lower band it could be considered oversold.

Tracking additional stock levels, Bhagyanagar India Limited (BHAGYANGR.NS) has a 14-day Commodity Channel Index (CCI) of -32.72. Even though the name contains the word commodity, CCI can be used on other investment tools such as stocks. The CCI was developed to typically stay within the -100 to +100 levels. Traders may use the indicator to determine stock trends or to identify overbought/oversold conditions. A CCI reading above +100 would imply that the stock is overbought and possibly ready for a correction. On the other hand, a reading of -100 would imply that the stock is oversold and possibly set for a rally.

A popular tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. They may also be used to assist the trader figure out proper support and resistance levels for the stock. Currently, Bhagyanagar India Limited (BHAGYANGR.NS) has a 200-day MA of 23.88, and a 50-day of 25.36. Presently, the stock has a 14-day RSI of 48.78, the 7-day is sitting at 36.69, and the 3-day is resting at 9.47. The Relative Strength Index (RSI) is one of multiple popular technical indicators created by J. Welles Wilder. Wilder introduced RSI in his book “New Concepts in Technical Trading Systems” which was published in 1978. RSI measures the magnitude and velocity of directional price movements. The data is represented graphically by fluctuating between a value of 0 and 100. The indicator is computed by using the average losses and gains of a stock over a certain time period. RSI can be used to help spot overbought or oversold conditions. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum.

Bhagyanagar India Limited (BHAGYANGR.NS)’s Williams Percent Range or 14 day Williams %R presently is at -71.02. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold. We can also take a look at the Average Directional Index or ADX of the stock. For traders looking to capitalize on trends, the ADX may be an essential technical tool. The ADX is used to measure trend strength. ADX calculations are made based on the moving average price range expansion over a specified amount of time. ADX is charted as a line with values ranging from 0 to 100. The indicator is non-directional meaning that it gauges trend strength whether the stock price is trending higher or lower. The 14-day ADX for Bhagyanagar India Limited (BHAGYANGR.NS) presently sits at 43.99. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend.