Be cautious while picking small & mid-caps; 3 scrips which can give 4-8% returns in short-term

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26 Aug, 2025 12:21

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The markets traded volatile on the expected lines and settled half a percent lower last week, citing mixed global cues and continued weakness in the rupee.

The holiday-shortened week started on a feeble note and the situation deteriorated further in the following session. However, recovery in the last two sessions pared the losses significantly as participants took note of improved macroeconomic data and rebound in the rupee.

A mixed trend was witnessed on the sectoral front while pressure remained high on the broader front. With no major event on the local front, global markets and currency movement will continue to dictate the market trend.

It’s a normal corrective phase and expect further consolidation in the Nifty within 11,100-11,700 ahead. Though there’s no clear trend on the sectoral front but private banks, auto, pharma, IT and metal counters should be preferred over others for long trades.

Any uptick in PSU banking should be used to reduce existing longs and create fresh shorts as and when needed.

The underperformance from the broader indices may also continue so maintain extra caution while choosing stocks from smallcap and midcap space.

Here is a list of top three stocks which could give 4-8% return in 1 month:

GAIL India has retraced marginally of late, after making a record high in August 2018 and found support around the short-term moving averages (50/100) EMA on the daily chart.

We believe it is an excellent buying opportunity, considering the overall chart structure and positioning of confirmations indicators. Traders can accumulate the stock within Rs 369-373. It closed at Rs 372.55 on September 17, 2018.

L&T has been consolidating in a broader range of roughly Rs 1240-1420 for the past seven months. It had tested the lower band of the range last month and witnessed a strong rebound thereafter.

Currently, it is hovering in the middle of the range and is likely to see a fresh surge in the near future. We advise initiating fresh long positions in the range Rs 1335-1345. It closed at 1344.75 on September 17, 2018.

Titan Company has been consolidating for past almost nine months and formed a distribution pattern “Head and Shoulder”.

It is trading on the verge of a breakdown from the same and likely to witness a sharp fall. The positioning of confirmation indicators is also in sync. Traders should use any bounce to go short in the given range Rs 830-840. It closed at Rs 820.55 on September 17, 2018.

Disclaimer: The author is President, Religare Broking. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.