We expect Smallcap and midcap stocks to perform further and we can see another 3-5% upside in Midcap and smallcap space, Rajesh Palviya, Head Technical & Derivatives at Axis Securities, said in an interview with Moneycontrol’s Kshitij Anand.
The momentum in Indian market reversed in just 4 trading sessions. Nifty rose 3.7% in the week gone by, do you think the momentum will continue?
Yes, we do think that the momentum is likely to continue for various reasons and there is a high probability that Nifty50 could actually scale up toward the all-time high level of 12,400 level in February series. Technically speaking, post-Budget, the index has registered a low (11,614) which is around its 200-Day (11,655) EMA support and then bounced back on a strong note.
It witnessed a “V”-shaped recovery and recovered all the earlier losses. On a Week-on-week (WoW) basis, the index gained 3.75 percent to close 12,086 levels.
Going forward, any decisive close above 12,230 levels will confirm the above said pattern and the projected target of the pattern is around 12,600-12,800 levels.
This buying support zone also coincides with its 50% Fibonacci Retracement level (11533) of the previous up move (10637-12430) which remains a crucial support zone to watch for.
The daily strength indicator RSI has bounced from the oversold territory after a period of 6 months indicating strong comeback by the bulls.
Heavyweights such as HDFC Bank, HDFC Ltd, and ICICI Bank have recovered sharply from the lows indicating buying support at lower levels. The Advance decline ratio has turned positive from the last 3 days indicating that the overall breadth has turned positive for the market.
What are the important support and resistance levels to watch out for in the coming week?
The Nifty is likely to face immediate resistance around 12,200, and once it manages to cross above the said level, we may see another round of fresh buying in the market.
It may scale towards 12,350-12,450 in the short-term, however, on the lower side 12050 -11960 is likely to act as crucial support for any corrective action in the near-term. Our preferred strategy would be to buy quality stocks if Nifty corrects and comes near the support levelTop five stocks which recorded a breakout in the week gone by and are still ripe for future returns?
Here is a list of top 5 stocks which could be good breakout buys at current levels:Bharat Petroleum Corporation Ltd: Buy| LTP: Rs 491| Buying Range: Rs 492-484| Target: Rs 525-537| Stop Loss: Rs 470
The stock has broken out from a three-month-long “Flag Formation” on a closing basis which indicates good comeback by the bulls with high volumes.
The stock has bounced from the range of 38.20% - 50% Fibonacci retracement level supporting our bullish thesis. On the weekly chart, the stock continues to make a series of higher highs and higher lows indicating further continuation of the bullish trend.
Weekly strength indicator RSI and momentum oscillator stochastic have given a bullish crossover which supports our view that the momentum is likely to continue in the near term.
The stock price is sustaining well above its 20 and 50 and 100-Day SMA which supports bullish sentiments ahead.VIP Industries Ltd: Buy| LTP: Rs 496| Buying Range: Rs 496-488| Target: Rs 540-553| Stop Loss: Rs 470
On the weekly chart, the stock price has given a breakout from a one-year-long “Inverted Head & Shoulder” formation indicating a trend reversal.
This Inverted Head & Shoulder breakout is accompanied with high volumes indicating good participation by the bulls. On the daily chart, the stock closed above the upper Bollinger band indicating strong uptrend.
The weekly strength indicator RSI and stochastic indicator continue to trend higher indicating our view that the upside momentum is likely to continue in the near-term.
The stock price is sustaining well above its 20 and 50 and 100-Day SMA which supports the bullish sentiments ahead.Ujjivan Financial Services Ltd: Buy| LTP: Rs 404| Buying range Rs 400-392| Target: Rs 437-445| Stop Loss: Rs 375
On the weekly chart, the stock price has decisively broken out from its past one-year consolidation range of Rs 250-360 and has registered a new 52-week high.
It also continues to make a series of higher Tops and higher Bottoms indicating a sustained uptrend. The weekly strength indicator, RSI and momentum oscillator stochastic, are in positive territory which supports upside momentum to continue in the near term.
On the weekly chart, high volumes are observed indicating good participation by the bulls. The stock price is well placed above its 20 and 50-Days SMA which supports bullish sentiments in the short to medium-term.Adani Enterprises Ltd: Buy| LTP: Rs 239| Buying Range 235-231| Target: Rs 256-262| Stop Loss: Rs 222
On the daily chart, the stock price has taken support from a 3-month long consolidating range indicating strong comeback by the bulls. This buying has also been observed after the stock has retested the one month long up sloping trend line.
The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near-term.
On daily chart, high volumes are observed indicating good participation by the bulls. The stock price is well placed above its 20 and 50-Day SMA which supports bullish sentiments in short to medium term.Sun Pharma Advanced Research Company Ltd: Buy| LTP: Rs 204| Buying Range 202-198| Target: Rs 230-240| Stop Loss: Rs 182
On the weekly chart, the stock price has taken support from the breakout level of the prior “W-pattern indicating that the prior uptrend might now resume.
The selling that we saw in the last couple of weeks was completely absorbed by the bulls breaking the back of the bears.
On the daily chart, the stock has also closed above the upper Bollinger band for the first time in the last one month indicating a strong uptrend.
The daily strength indicator RSI continues to trend higher and the momentum indicator Stochastic continues to make a series of higher highs and higher lows which supports upside momentum to continue in the near term.What is your outlook on the small & midcap space that has performed in line with benchmark indices in the week gone by?
Midcap and smallcap stocks generally performed in a healthy market condition and since the last 2-3 months we are in a positive trend, the market has witnessed broad base buying action in quality Midcap and small caps.
We expect Smallcap and midcap stocks to perform further and we can see another 3-5% upside in Midcap and smallcap space. Investors can add quality midcaps and small-cap can in their portfolio for decent returns on the near-to-short term basis.
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