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Expect midcap, smallcap outperformance to continue


The Nifty is expected to continue its positive momentum this week, according to technical analysts. However, they will see if the index is able to rise above the 12400 level. The outperformance of mid- and small-caps is expected to continue in the new year. The index is expected to find support near 12200 levels and face resistance in the 12350-12400 range in the short term.

Where We Are: The holiday week gone-by saw a tepid expiry to December series as markets mainly traded rangebound due to lack of any global trigger amidst the festive lull. The overall market breadth improved with much of action seen in midcap smallcap counters. Nifty closed the week at 12245 ending 12% up year to date.

What Is In Store: As we head into January 2020 series, expect Nifty to consolidate at current levels with stock-specific action. Expect midcap/smallcap outperformance to continue into the new calendar year. Level-wise, 12320-12350 is an immediate target zone on Nifty. On the downside, 12220-12190 is support zone. Nifty 200 DMA is at 11550.

What Could Investor Do: Investors can continue holding quality scrips and ride the current upward momentum. Stock specific ones can look at accumulating frontline FMCG counters like ITC, Marico for the upside targets of 265, 372 in short-medium term. Among the banking scrips Axis Bank, SBI are good accumulation candidates and expect them to head towards 850, 400 levels in short to medium term. Further, one can look at accumulating LNT, MNM, UPL at current levels for upside targets of 1450, 590, 650. Metal counters Hindalco, Tata Steel are showing good chart structures and can be accumulated at current levels for higher targets of 240, 550. Among the midcaps, Concor, Cochin Shipyard, Shriram Transport are good accumulation candidates for sizeable upside in near term.

Source: Economic Times