Stretched Below 20 EMA
Rubber-band trading: sharp dips away from the short-term average tend to revert.
Mean reversion Data as of 2026-09-18 close
1 · Rules
▶ Entry
Close 7%+ below the 20-day EMA while above the 200-day SMA.
Screener form: pct_vs_ema20 <= -7 AND close > sma200 — % vs EMA 20 ≤ -7 and Close > SMA 200.
■ Exit
Close back above the 20-day EMA.
Signals are read on the close; the backtest fills at the next session's open.
2 · Stocks triggering the entry today (13)
| Stock | Sector | Close | Chg | Score | RSI (14) | ADX (14) | Relative volume (RVOL) |
|---|---|---|---|---|---|---|---|
| MAHASTEELMahamaya Steel Industries Limited | Metal | ₹1,142 | -4.99% | 44 | 42.77 | 27.81 | 0.17× |
| UDSUpdater Services Limited | — | ₹189.82 | +0.83% | 34 | 33.67 | 33.16 | 0.18× |
| TATATECHTata Technologies Limited | IT | ₹722.45 | -4.78% | 33 | 32.25 | 11.70 | 2.25× |
| SIGACHISigachi Industries Limited | Pharma | ₹29.60 | +0.92% | 32 | 42.62 | 37.71 | 2.72× |
| SOLARINDSSolar Industries India Limited | Chemicals | ₹18,555 | -1.38% | 29 | 33.99 | 33.25 | 0.93× |
| MAGADSUGARMagadh Sugar & Energy Limited | FMCG | ₹504.75 | -0.67% | 28 | 38.01 | 28.90 | 0.42× |
| DALMIASUGDalmia Bharat Sugar and Industries Limited | FMCG | ₹390.50 | +0.00% | 28 | 35.01 | 30.98 | 0.38× |
| GUJALKALIGujarat Alkalies and Chemicals Limited | Chemicals | ₹638.70 | -5.20% | 27 | 32.13 | 30.65 | 1.40× |
| AUTOINDAutoline Industries Limited | Auto | ₹78.34 | +0.31% | 26 | 36.85 | 12.27 | 0.30× |
| RAJRATANRajratan Global Wire Limited | Metal | ₹452.60 | +3.31% | 25 | 36.50 | 24.54 | 1.52× |
| INGERRANDIngersoll Rand (India) Limited | — | ₹4,156 | -1.64% | 25 | 28.94 | 27.04 | 1.47× |
| CPPLUSAditya Infotech Limited | — | ₹3,355 | -0.69% | 25 | 37.01 | 20.51 | 3.84× |
| IFCIIFCI Limited | Financial Services | ₹76.51 | -0.75% | 22 | 40.43 | 26.63 | 0.47× |
👀 Setting up (33)
| Stock | Sector | Close | Chg | Score | RSI (14) | ADX (14) | Relative volume (RVOL) |
|---|---|---|---|---|---|---|---|
| MUKKAMukka Proteins Limited | FMCG | ₹26.93 | -4.77% | 47 | 45.14 | 29.71 | 0.40× |
| MAHASTEELMahamaya Steel Industries Limited | Metal | ₹1,142 | -4.99% | 44 | 42.77 | 27.81 | 0.17× |
| RADHIKAJWERadhika Jeweltech Limited | Consumer Durables | ₹71.24 | +4.58% | 39 | 45.96 | 31.96 | 0.18× |
| KOTARISUGKothari Sugars And Chemicals Limited | FMCG | ₹26.97 | -1.50% | 39 | 41.93 | 16.99 | 0.20× |
| NILKAMALNilkamal Limited | — | ₹1,888 | -1.55% | 35 | 43.21 | 37.73 | 0.65× |
| UDSUpdater Services Limited | — | ₹189.82 | +0.83% | 34 | 33.67 | 33.16 | 0.18× |
| BAJAJHINDBajaj Hindusthan Sugar Limited | FMCG | ₹19.53 | +0.77% | 34 | 42.48 | 27.30 | 0.28× |
| UTTAMSUGARUttam Sugar Mills Limited | FMCG | ₹260.25 | +3.11% | 33 | 41.78 | 31.94 | 0.31× |
| TATATECHTata Technologies Limited | IT | ₹722.45 | -4.78% | 33 | 32.25 | 11.70 | 2.25× |
| SIGACHISigachi Industries Limited | Pharma | ₹29.60 | +0.92% | 32 | 42.62 | 37.71 | 2.72× |
| NETWEBNetweb Technologies India Limited | IT | ₹4,664 | +1.88% | 32 | 40.31 | 26.84 | 0.67× |
| APOLLOApollo Micro Systems Limited | — | ₹370.70 | -2.00% | 32 | 39.47 | 18.92 | 1.41× |
| AEROENTERAeroflex Enterprises Limited | Metal | ₹125.49 | +2.07% | 32 | 44.25 | 21.67 | 0.59× |
| LAMBODHARALambodhara Textiles Limited | — | ₹120.21 | +1.24% | 30 | 42.12 | 28.66 | 0.07× |
| JUBLCPLJubilant Agri and Consumer Products Limited | Chemicals | ₹2,000 | -1.00% | 30 | 41.04 | 17.60 | 0.70× |
| DIXONDixon Technologies (India) Limited | Consumer Durables | ₹13,005 | -2.14% | 30 | 30.70 | 33.36 | 1.04× |
| SOLARINDSSolar Industries India Limited | Chemicals | ₹18,555 | -1.38% | 29 | 33.99 | 33.25 | 0.93× |
| MAGADSUGARMagadh Sugar & Energy Limited | FMCG | ₹504.75 | -0.67% | 28 | 38.01 | 28.90 | 0.42× |
| DALMIASUGDalmia Bharat Sugar and Industries Limited | FMCG | ₹390.50 | +0.00% | 28 | 35.01 | 30.98 | 0.38× |
| SUMICHEMSumitomo Chemical India Limited | Chemicals | ₹460.85 | +1.19% | 27 | 30.03 | 35.24 | 3.16× |
| GUJALKALIGujarat Alkalies and Chemicals Limited | Chemicals | ₹638.70 | -5.20% | 27 | 32.13 | 30.65 | 1.40× |
| SKMEGGPRODSKM Egg Products Export (India) Limited | FMCG | ₹229.75 | -0.93% | 26 | 33.31 | 20.13 | 0.44× |
| AUTOINDAutoline Industries Limited | Auto | ₹78.34 | +0.31% | 26 | 36.85 | 12.27 | 0.30× |
| RAJRATANRajratan Global Wire Limited | Metal | ₹452.60 | +3.31% | 25 | 36.50 | 24.54 | 1.52× |
| INGERRANDIngersoll Rand (India) Limited | — | ₹4,156 | -1.64% | 25 | 28.94 | 27.04 | 1.47× |
| HFCLHFCL Limited | Infrastructure | ₹215.71 | +2.99% | 25 | 43.65 | 21.04 | 0.56× |
| CPPLUSAditya Infotech Limited | — | ₹3,355 | -0.69% | 25 | 37.01 | 20.51 | 3.84× |
| BHAGCHEMBhagiradha Chemicals & Industries Limited | Chemicals | ₹246.85 | -0.44% | 25 | 31.47 | 20.79 | 2.69× |
| BCLINDBcl Industries Limited | — | ₹33.06 | -0.33% | 25 | 30.87 | 27.07 | 0.44× |
| IFCIIFCI Limited | Financial Services | ₹76.51 | -0.75% | 22 | 40.43 | 26.63 | 0.47× |
3 · Backtest — Nifty 50 stocks since 2014
223
Trades
71.3%
Win rate
+1.55%
Average trade
1.6
Profit factor
16.5d
Avg holding
+0.6%
Median CAGR / stock
Buy & hold +15.8%
-14.2%
Median max drawdown
Buy & hold -53.7%
2.5%
Time in market
2.0%
Stocks where it beat B&H
🛡️ Robustness — Stretch %
The published rule uses 7. If the edge vanishes one step either side, it was probably fitted to history.
| Stretch % | Trades | Win | Avg trade | PF | Median CAGR |
|---|---|---|---|---|---|
| 5 | 600 | 74.2% | +1.46% | 1.73 | +1.0% |
| 7 | 223 | 71.3% | +1.55% | 1.6 | +0.6% |
| 10 | 49 | 69.4% | +1.04% | 1.27 | +0.0% |
Robust The average trade is positive at every tested setting. Profitable average trade in 76.9% of years with 5+ trades.
📅 By year (walk-forward view)
| Year | Trades | Win | Avg trade |
|---|---|---|---|
| 2014 | 19 | 73.7% | +4.43% |
| 2015 | 23 | 87.0% | +1.05% |
| 2016 | 13 | 76.9% | +3.07% |
| 2017 | 10 | 80.0% | +3.96% |
| 2018 | 27 | 55.6% | +0.87% |
| 2019 | 11 | 63.6% | +1.20% |
| 2020 | 24 | 54.2% | -4.94% |
| 2021 | 30 | 83.3% | +5.17% |
| 2022 | 22 | 68.2% | +0.95% |
| 2023 | 5 | 40.0% | -8.60% |
| 2024 | 21 | 90.5% | +4.71% |
| 2025 | 8 | 37.5% | -1.62% |
| 2026 | 10 | 80.0% | +2.00% |
Most recent trades in the test
| Stock | Entry | Exit | Return |
|---|---|---|---|
| HINDALCO | 2026-06-17 | 2026-07-30 | -1.92% |
| ONGC | 2026-06-01 | 2026-07-09 | -6.55% |
| SBIN | 2026-05-12 | 2026-06-09 | +0.63% |
| EICHERMOT | 2026-03-13 | 2026-04-09 | +3.90% |
| SBIN | 2026-03-16 | 2026-04-09 | +0.88% |
| SHRIRAMFIN | 2026-03-20 | 2026-04-09 | +4.79% |
| AXISBANK | 2026-03-13 | 2026-04-07 | +0.93% |
| HINDALCO | 2026-03-24 | 2026-04-02 | +5.67% |
| TATASTEEL | 2026-03-16 | 2026-03-23 | +5.25% |
| MARUTI | 2026-01-30 | 2026-02-12 | +6.39% |
| KOTAKBANK | 2025-07-29 | 2025-08-20 | +2.51% |
| WIPRO | 2025-03-03 | 2025-05-13 | -8.24% |
| HCLTECH | 2025-01-28 | 2025-03-25 | -5.44% |
| MAXHEALTH | 2025-02-13 | 2025-03-20 | +9.11% |
| ETERNAL | 2025-01-08 | 2025-02-03 | -7.22% |
4 · Risk
Stretched can get more stretched in a sell-off.
Test assumptions: long only, one position per stock, next-open fills, 0.2% round-trip cost, split-adjusted prices without dividends, current Nifty 50 members (survivorship bias). Past results do not predict future returns.
5 · Test it on any stock
Open the AI Backtester with these rules pre-filled, pick a stock and a date range, and add your own stop-loss or target.
Buy when close is more than 7 percent below the 20-day EMA and close is above the 200-day SMA. Sell when close rises above the 20-day EMA.
🔗 Other mean reversion strategies
⚠️ Educational technical analysis computed automatically from end-of-day NSE prices — not investment advice. Flash Finance is not SEBI-registered. Indicators describe what price has done; they do not predict what it will do. Verify levels on a live chart and manage risk before acting.
