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21 stocks have something to offer before they enter oversold zone on RSI

Momentum oscillator Relative Strength Index (RSI), which was developed by J Welles Wilder, explains the strength and movement of stock prices to determine the overbought and oversold regions. The oscillator moves between 0 to 100.

Theoretically, If RSI for any stock enters 70 level, it is considered as overbought zone and if it moves below 30, the stock is known to have slipped into oversold territory. It also helps to identify the trend on divergence in prices.  

In various studies, the oscillator is used to generate signal on price patterns and trendline levels. Analysts have correlated RSI with other indicators to gauge better results.

When a stock's price approach near 70 levels, the trend starts to deteriorate and prices start to rise on a slower pace. Few stocks trade flat, while others start losing grounds.    

Here is the list of stocks from Nifty500 index, which have breached 60 levels on RSI and are heading towards overbought territory:-

Nifty500 stocks crossing 60 levels on RSI     
Company Name Symbol RSI Level
Adani Power Ltd. ADANIPOWER 61.57
AIA Engineering Ltd. AIAENG 61.18
Axis Bank Ltd. AXISBANK 60.33
Bajaj Finserv Ltd. BAJAJFINSV 62.53
Bharat Forge Ltd. BHARATFORG 61.05
Cyient Ltd. CYIENT 61.3
Elgi Equipments Ltd. ELGIEQUIP 63.03
Endurance Technologies Ltd. ENDURANCE 60.14
Grasim Industries Ltd. GRASIM 60.53
Indian Oil Corporation Ltd. IOC 64.24
India Tourism Development Corporation Ltd. ITDC 62.2
Lakshmi Machine Works Ltd. LAXMIMACH 60.16
Max India Ltd. MAXINDIA 60.79
Narayana Hrudayalaya Ltd. NH 60.45
Shriram Transport Finance Co. Ltd. SRTRANSFIN 60.3
Supreme Industries Ltd. SUPREMEIND 64.49
Symphony Ltd. SYMPHONY 66.41
Tata Motors Ltd. TATAMOTORS 62.34
UltraTech Cement Ltd. ULTRACEMCO 63.62
WABCO India Ltd. WABCOINDIA 62.78
Zee Entertainment Enterprises Ltd. ZEEL 64.23

Most of the stocks that enter overbought region witness rally towards 75 – 78 and see selling pressure. The correction might not be severe; however, the trend eliminates the speed to which prices rise. 

Company Name Symbol RSI Level
Balrampur Chini Mills Ltd. BALRAMCHIN 78.37
Bata India Ltd. BATAINDIA 76.55
Greenply Industries Ltd. GREENPLY 73
Manappuram Finance Ltd. MANAPPURAM 74.63
Sundaram Finance Ltd. SUNDARMFIN 71.58
Sun TV Network Ltd. SUNTV 71.26
Swan Energy Ltd. SWANENERGY 85.92
Tech Mahindra Ltd. TECHM 73.2
UPL Ltd. UPL 73.89
Wipro Ltd. WIPRO 70.15


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