Shah is of the view that the broader market has undergone healthy consolidation, thus any cool off from hereon should not be construed as negative, instead, it should be capitalized to accumulate quality midcaps.
Bulls managed to regain control of D-Street as benchmark indices managed to close with gains of more than 2 percent for the week ended September 11 compared to over 2 percent fall seen in the previous week.
The S&P BSE Sensex rose 1.3 percent while the Nifty50 gained 1.1 percent for the week ended September 11 compared to the S&P BSE Small-cap index which fell 0.3 percent, and the S&P BSE Mid-cap index was down 1.07 percent in the same period.
Although broader markets underperformed there are as many as 20 stocks in the S&P BSE Small-cap index which rose 10-30 percent in the week gone by.
Stocks that gave double-digit returns that include names like VIP Clothing, Tata Elxsi, Career Point, Shilpa Medicare, Strides Pharma, Alembic, Dish TV, and Videocon Industries etc. among others.
Experts are of the view that small & midcaps are likely to remain in focus in the coming week, and any dips could be a good buying opportunity.
"We expect the markets to consolidate at current levels in the range of 11,200-11,700 levels over the next few weeks. The Nifty Midcap 100 index has resistance near its 200-week and 21-months average," Rajeev Srivastava, Chief Business Officer at Reliance Securities told Moneycontrol.
"We believe time correction could keep them sideways and any decline for the midcap index near to the support of 16,100 levels would be a good opportunity to add longs," he said.
The Nifty formed a bullish candle that resembles a ‘Hammer-like’ pattern on the daily charts. The Nifty50 reclaimed 11400 levels after retest 11200 in the week gone by.
Experts are of the view the market is likely to consolidate in the coming week and small & midcaps are likely to outperform. Stiff resistance is placed at 11550
“We expect Nifty to extend the ongoing consolidation (11100-11500) amid stock-specific action as over the past ten sessions index retraced 80% of preceding 10 sessions up move (11111-11794). Lack of faster retracement on either side signifies prolonged consolidation,” Dharmesh Shah, Head – Technical, ICICI direct told Moneycontrol.
“We expect, broader market to relatively outperform the benchmark, as after past two week’s correction (~8%), both, Nifty midcap and small-cap indices found support from ~50% retracement of their August rally,” he said.
Shah is of the view that the broader market has undergone healthy consolidation, thus any cool off from hereon should not be construed as negative, instead, it should be capitalized to accumulate quality midcap and small caps which offer fresh entry opportunity with favorable risk-reward.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.