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Opposite to the previous session, the broader markets are witnessing some selling pressure. Many sectoral indices are trading in the red zone, including the index which is down 0.89% to 51,864, by 12:07 PM IST.
One counter from this space that has just begun its downtrend and should be kept on the watchlist is Marico Limited (NS:). It is a well-known FMCG company with a market capitalization of INR 75,439 crore and owns popular brands such as Parachute, Livon, Saffola, etc.
Image Description: Daily chart of Marico with volume bars at the bottom
Image Source: Investing.com
One of the easiest ways to determine the downtrend of the security is to watch out for a lower low and lower high (LL & LH) formation on the chart. As per the Dow theory, this is the classical representation of a falling market.
The share price of Marico took a hit of 2.3% to INR 570 (low of INR 568.2), as of writing, and fell below the previous trough of INR 568.6, marked on 21 September 2023, which marks the LL & LH formation. As this trend structure starts today, the stock can be deemed to be in a downtrend from today onwards, at least till the immediate peak is not breached, which is INR 586 as of now.
The intensity of today’s session pressure can be gauged by the fact that the stock wiped out the gains of the last 3 sessions. It might take some time for the counter to extend its fall as it is a large-cap (which generally has lesser volatility), the next support at around INR 552 would probably be the next stop for Marico shares.
Thank you to all who attended my webinar on 27 September. Remember, the massive discount offer of 65% on InvestingPro+ via the coupon code PROW478 is only valid till 10th October 2023. For any assistance reach me out at aayush.k@investing.com or on my X (formerly, Twitter) handle – aayushxkhanna
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