Falling midcaps offer good buys; Manappuram shines: IIFL

Harchekar is positive on Manappuram which has broken out of the congestion zone and advises investors who wish to initiate long positions to maintain a stop loss at Rs 29.

Below is an edited transcript of the analysis. Also watch the accompanying videos.

There are plenty of midcap opportunities as most of the midcap stocks are down close to 20-30% from their annual lows. The fall in mid-cap stocks also resulted in  good bargain-buying at the lower levels.

The midcaps are into a good retracement zone. Stocks like City Union Bank , which provided a good breakout on the weekly chart is projecting an upside of more than 10%. So the action is more stock-specific from a midcap perspective. In the large-caps, the trading action is more sideways with negative bias.

Manappuram is looking very good on the charts and has broken out of the congestion zone of Rs 24-30. Right now it's heading toward Rs 35 in the short-term. But investors have to watch whether the stock will be able to sustain levels above Rs 36 which again turns out to be a make-or-break level from a long-term perspective.

If it is unable to take that, then it might head back towards the Rs 29-28 zone. So right now, the view on Manippuram is on the positive side and if investors wish to initiate long positions, then the stop loss has to be at Rs 29.

Disclosure: We hereby affirm that we have no personal holdings in the stocks that have been recommended.