Bearish signal: These stocks have slipped below the support level

India’s stock market is going through a phase of consolidation after a correction that shaved off almost a tenth of its value from its all-time high in October. Although many stocks have managed to retain their investment allure, several have settled at a lower level while a few are dropping further as the liquidity overflow reduces.

Investors looking at charts and price and volume patterns have various parameters to decide whether a stock is ripe for the pick or is showing signals of pest activity that is best left untouched.

One of the simpler technical marks to pick or move away from a stock is to see which ones are moving above their first resistance level. This level is based on the principle of pivot points. This, in turn, is calculated from the high, low and closing share price of the previous day, as an average of the three.

Once we have a pivot price point, we can use that to derive resistance and support price levels. Resistance levels are higher bars from the pivot points. If a stock crosses a resistance level it could be poised for an upward movement. On the flip side, if the pivot point slides below the support level it could sink further.

Resistance levels are by default above the pivot point while support levels are below it.

Traders also have different resistance and support levels These are stepped up or down levels of the same principle so a stock would have R1, R2 and R3 levels, depicting resistance, and concurrently S1, S2 and S3 for support.

We ran an exercise to see which stocks have moved below their S1 level and could be set for a further slide.

The list of stocks whose pivot point has slipped past the first support level include innerwear maker Page Industries, which has the licence to sell products under the Jockey brand; auto component maker Bosch and NBFC behemoth Bajaj Finserv.

Among others, there are companies such as Disa India, D-Mart operator Avenue Supermarts, Navin Fluorine International, SKF India, Garware Technical Fibres, HDFC Asset Management, Siemens, Nazara Technologies and Gujarat Flurochemicals.

The list stretches longer with other companies such as Indigo Paints, BSE Ltd, Godrej Properties, Shriram City Union Finance, Adani Transmission, MCX, Vadilal, TCI Industries and CDSL.