Mid-cap and small-cap stocks shine on Indian Stock Exchanges
Indian markets have witnessed renewed investor interest in mid-cap and small capital stocks over the last few trading sessions. These stocks have suffered massive decline over the last few months and a relief rally was long awaited. Investors can pick up some stocks in these segment for medium term investments. Comments on stock market action by Mustafa Nadeem, CEO Epic Research.....
Investors are overtaking the suffered mid- and small-cap shares giving hopes to their cheaper valuations in position to their large-cap combinations. The BSE MidCap index and Small-Cap indices advanced 1 percent and 1.4 percent, respectively, ending higher for the fifth consecutive session last day. During the last few sessions, the MidCap index has gained 3 percent and the SmallCap index has gained 4 percent.
At this point in time, no one would like to catch a falling Knife which is what Small caps and Midcaps are looking like. These indexes are under a correction mode and after having a bearish momentum for almost 7 quarters valuations are at very attractive levels. The long term view is still intact as this space offered returns in 4 digits in some of its stocks. Many of them posted 3 digit returns. One needs to have that kind of patience and longevity in terms of investment. So Investors should think of the broader picture here and make sure they are invested in this space. Picking out single stock for that kind of return is not an easy task and there is no point in it. So one can look at funds that have exposure in this space. If not, you are already late.
The outlook for midcap seen is that the Smallcap index(NiftySMCP100) is a very important support at present. We believe the oversold levels have been sustained in the last few days of price action and there is a clear divergence. In the midcap space as well we believe there can be some sideways move with upside swing as prices are sustaining the lower levels and a short term impending upside move can be seen. In both Index these impending up move based on oversold levels can be short term but how long would they be sustaining is a different story.
In mid-cap space, Voltas CMP 635 -Above 650 Target 720 SL 600 Max Financial - CMP 414 target 455 SL 390 are looking like good bets.
In small-cap segment, Advanced Enzy - CMP 165 Target 190 SL 144 Atul Limited CMP 3744 Target 4300 SL 3450 are interesting stocks for investors.