With benchmark indices of the Indian markets at record highs, analysts are expecting the bull run to spill over in the mid-cap and small-cap space. In a note, Vinay Rajani, a technical research analyst at HDFC Securities, noted that despite Nifty 50 and Sensex hitting record highs this week, Nifty Smallcap index and Nifty Midcap index is yet to cross their previous all-time highs.
"There is a good chance that investors could get a return from here as well. The only thing required is the selection of good quality stocks from the midcap space," he said in an article on Moneycontrol.
"If we see the NSE500 universe, 81% of the stocks are above their 200-DMA, which is also a high reading but still lower than the bullish scenario of the year 2017 and 2014," Rajani added.
He named three stocks with buy calls for gains in the next 2-3 weeks:
1. Avenue Supermarts
Target price: Rs 2,750
At the time of writing his recommendation, the LTP (last trading price) of the stock was Rs 2,518. The stock has surpassed the target price on Wednesday and hit a new all-time high of Rs 2,755 on NSE on expectation of better sales during festive season Diwali and expansion of its e-commerce operations ('D-Mart Ready').
Rajani from HDFC Securities said that the stock price has broken out from the downward sloping trendline, adjoining the previous two major tops on the weekly charts.
"The stock is placed above all important moving averages, indicating a bullish trend on all timeframes. It has also registered a breakout from the flag pattern, which indicates the continuation of an uptrend," he said further.
2. Nippon Life India Asset Management
Target price: Rs 304.90
"The stock has broken out from the last three week's consolidation phase," Rajani said. "Asset management companies have started getting traction recently. Short-term moving averages have crossed over medium to long-term moving averages in the recent past. The stock has reclaimed a level above its 200-day EMA," he added.
3. L&T Technology Services
Target price: Rs 2,020
"The stock is on the verge of registering a new all-time high above Rs 1,872. In the week gone by, the stock closed at the highest level on the weekly basis and broke out from the long consolidation which held for 7 consecutive weeks. The stock has also broken out from the downward sloping trendline, adjoining previous major tops," HDFC Securities Rajani said.
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