The index is currently just 3 per cent away from an all-time record high. This time the rally has been led by Reliance Industries and ICICI Bank, which have scaled to new 52-week peaks.
While the broader markets are still languishing, there is momentum in some stocks, where quarterly numbers have been good or optimism abounds.
Time to book profits
In shares where individuals have made profits, it might make sense to take some profits off the table. However, there are very few shares where investors would have made decent profits in the last one year. In most of the stocks investors have lost money.
At the moment global cues are also extremely supportive with the S&P 500 hitting a new record high.
This is largely on optimism that the US-China trade deal would go through.
However, global markets would continue to remain vulnerable to slowing global growth. So, if there is an opportunity of booking profits at higher levels, it would be a good idea to do so.
Time to look at midcaps
It may also not be a bad idea to make a churn in your portfolio and move from largecap stocks to the high beta midcap stocks.
In this, one would have to again look for quality names and stay away from stocks, where the management track record has been poor or there is a problem of pledged shares.
Also, it would be a good idea to avoid companies that are highly leveraged. Looking for companies where the dividend track record has been great, would not be a bad idea. Karnataka Bank, Hindustan Zinc, Jagran Prakashan are some stocks with a solid track record for paying dividend every year.
Some of these companies are also cash rich, debt free companies. While it would be very difficult to predict the performance of a company, it is imperative to do some research before buying. The best idea would be to look only for solid dividend paying companies that have a proven track record.