90% of Nifty500 firms, 49 stocks of Nifty50 trade above 200-DMA

Time to be selective, recommend analysts

- PUNEET WADHWA & REX CANO

Nearly 90 per cent of the stocks comprising the National Stock Exchange Nifty 500 Index and 49 of the 50 stocks that make up the Nifty50 are trading above their respective 200-day moving averages (DMAS).

The 200-DMA is considered one of the most relevant trend indicators by investors and traders. They believe that stocks and indices trading above this key level exhibit strength and are likely to rally, while those trading below this level are viewed as bearish, with the stock/index expected to see a selloff.

The sharp run-up in the markets in the past few sessions has made analysts cautious. They now expect the markets to consolidate before resuming their upward journey.

Analysts suggest that investors should remain selective and invest only where valuations are within a comfortable zone with visibility in earnings.