12 oversold stocks to add to your watchlist. Is it finally time to come inside?

The benchmark Nifty 50 index has corrected ~4% and the US benchmark Dow Jones is down 1%.

In European markets, the German index DAX is up 10%, the French index CAC40 is up 12% and the UK’s FTSE100 is up 6%.

Is this the right time to bargain shop?

Indian stock markets witnessed selling pressure today and started the week with a negative bias.

As I talk about emotions, the best way to check the emotion meter is through the Fear and Greed indicators.

The Fear and Greed Index is a popular sentiment indicator used by traders to measure the level of fear or greed in the market.

The index ranges from 0 to 100, with values ​​above 50 indicating greed and values ​​below 50 indicating fear.

Excessive greed when the index goes above 80 is a sign of caution, while excessive fear when the index goes below 20 is an opportunity to accumulate an oversold stock.

On the Nifty 50 daily chart, the Fear & Greed index is in the extreme fear zone.

nifty daily chart

Historically, if the Fear and Greed index moves below 20 (Orange zone), it is the best buying opportunity, and Nifty has entered this zone as it broke Budget 2023 low of 17,343 .

A market reversal could be on the cards and I believe traders and investors should add the oversold stock to their watchlists.

oversold stocks in india

The best strength indicator a technical analyst will use to identify overbought and oversold zones is the Relative Strength Index (RSI).

The RSI ranges from 0 to 100 and is based on the average gains and losses of an asset over a given period of time.

An RSI value of 30 or less is generally considered oversold, while an RSI value of 70 or higher is considered overbought. When the RSI reaches an oversold level, it may suggest that the asset is undervalued and due for a price increase, and traders may be looking to buy the asset.

The minor trend on D-Street is bearish but the primary and secondary trend is still bullish.

Strategy to buy on dips, in primary and secondary bullish trend oversold stock works great.

We shortlisted the stocks on the basis of weekly and daily 14-period RSI.

Here is the list of stocks which are in oversold zone on daily as well as weekly charts from Nifty 500 index.

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Traders and investors should consider risk on if the market continues to trend south along with global markets.

Disclaimer: This article is for information purposes only. This is not a stock recommendation and should not be treated as such.

This article is syndicated equitymaster.com