A handful of quality names are pulling up the smallcap and midcap indices, creating the illusion of broad strength and leading to outperformance versus the headline indices, says Rupak De, Senior Technical Analyst at LKP Securities.
Edited excerpts from a chat:
Nifty ended the week 0.67% down but what troubled traders was the one-day-up, next-day-down trend. Traders complained stop losses getting hit on both sides as volatility was too high to digest and sometimes even without a visible trigger. What's your plan to deal with this volatility in the coming week?
Nifty traded with volatility throughout the week, influenced by several global factors. However, a late-week recovery helped sustain the overall positive tone. In the near term, the index is likely to move sideways to slightly positive bias. A ‘buy on dips’ approach remains appropriate in the current market environment. Key support levels are seen at 24,700 and 24,300, while a breakout above the 25,000 resistance level could open the path toward 25,350 and 25,750.
How do you read Nifty Bank's relative outperformance on the weekly charts? What are the levels to watch out for?
Bank Nifty continues to consolidate, with the index trading within a defined range. However, a closer look shows that it has recently taken support at the 21-EMA and bounced higher. This suggests that sentiment could remain positive over the next few sessions—or at least as long as the index holds above 54,500. A buy-on-dips strategy looks favorable at this point. Resistance is placed at 56,000; a decisive move above this level could trigger a meaningful rally in the banking space.
Smallcaps too outperformed largecaps. Are the charts indicating at profit booking ahead?
The midcap and smallcap spaces have been under a cloud of doubt for the past few months. Many broader market stocks continue to look vulnerable to selling pressure. While there is some stock-specific buying happening in this segment, overall skepticism still dominates. A handful quality names are pulling up the smallcap and midcap indices, creating the illusion of broad strength and leading to outperformance versus the headline indices.
That’s why stock selection is absolutely critical here. Picking the right names from the small and midcap universe will be the key to meaningful portfolio outperformance. I’ve said it before—this isn’t the easy market we saw in 2023, where almost everything you bought turned to gold. This time around, the market will truly test your stock-picking skills.
Honasa shares ended Friday session 20% higher after Q4 results. How would you trade the stock on Monday?
The stock has given a meaningful breakout from a saucer pattern and looks poised for a decent upside. I’d suggest entering with a smaller quantity at the current market price (CMP) and using any dips to add more. After a strong initial move, the stock may consolidate briefly before the next leg up. It can be accumulated on declines till 310, with a stop-loss placed below 297. On the upside, the stock has the potential to move toward 370/410.
Give us your top ideas of the week.
Buy FEDERALBANK 203.50 TGT 215 SL 197
The stock has moved above the falling trendline on the daily chart, indicating growing optimism. Moreover, the trend remains strong as the price is trading comfortably above key moving averages. Additionally, the RSI has formed a bullish crossover and is trending higher. In the short term, the stock is likely to maintain its strength, with potential to move towards 215, while support is placed at 197.
Buy ABREL 2192 TGT 2300 SL 2100
The stock has broken out of its previous consolidation on the daily chart, indicating increased optimism. Moreover, the trend remains strong, with the price trading comfortably above key moving averages. Additionally, the RSI has formed a bullish crossover, reinforcing the positive momentum. In the short term, the stock is likely to remain strong, with potential to move towards 2,300, while support is placed at 2,100.
Buy HINDCOPPER 238.10 TGT 255 SL 229
The stock has broken out of flag pattern on the daily chart, indicating increased optimism. Moreover, the trend remains strong, with the price trading above key moving averages. Additionally, the RSI has formed a bullish crossover and rising, reinforcing the positive momentum. In the short term, the stock is likely to remain strong, with potential to move towards 255, while support is placed at 229.
Edited excerpts from a chat:
Nifty ended the week 0.67% down but what troubled traders was the one-day-up, next-day-down trend. Traders complained stop losses getting hit on both sides as volatility was too high to digest and sometimes even without a visible trigger. What's your plan to deal with this volatility in the coming week?
Nifty traded with volatility throughout the week, influenced by several global factors. However, a late-week recovery helped sustain the overall positive tone. In the near term, the index is likely to move sideways to slightly positive bias. A ‘buy on dips’ approach remains appropriate in the current market environment. Key support levels are seen at 24,700 and 24,300, while a breakout above the 25,000 resistance level could open the path toward 25,350 and 25,750.
How do you read Nifty Bank's relative outperformance on the weekly charts? What are the levels to watch out for?
Bank Nifty continues to consolidate, with the index trading within a defined range. However, a closer look shows that it has recently taken support at the 21-EMA and bounced higher. This suggests that sentiment could remain positive over the next few sessions—or at least as long as the index holds above 54,500. A buy-on-dips strategy looks favorable at this point. Resistance is placed at 56,000; a decisive move above this level could trigger a meaningful rally in the banking space.
Smallcaps too outperformed largecaps. Are the charts indicating at profit booking ahead?
The midcap and smallcap spaces have been under a cloud of doubt for the past few months. Many broader market stocks continue to look vulnerable to selling pressure. While there is some stock-specific buying happening in this segment, overall skepticism still dominates. A handful quality names are pulling up the smallcap and midcap indices, creating the illusion of broad strength and leading to outperformance versus the headline indices.
That’s why stock selection is absolutely critical here. Picking the right names from the small and midcap universe will be the key to meaningful portfolio outperformance. I’ve said it before—this isn’t the easy market we saw in 2023, where almost everything you bought turned to gold. This time around, the market will truly test your stock-picking skills.
Honasa shares ended Friday session 20% higher after Q4 results. How would you trade the stock on Monday?
The stock has given a meaningful breakout from a saucer pattern and looks poised for a decent upside. I’d suggest entering with a smaller quantity at the current market price (CMP) and using any dips to add more. After a strong initial move, the stock may consolidate briefly before the next leg up. It can be accumulated on declines till 310, with a stop-loss placed below 297. On the upside, the stock has the potential to move toward 370/410.
Give us your top ideas of the week.
Buy FEDERALBANK 203.50 TGT 215 SL 197
The stock has moved above the falling trendline on the daily chart, indicating growing optimism. Moreover, the trend remains strong as the price is trading comfortably above key moving averages. Additionally, the RSI has formed a bullish crossover and is trending higher. In the short term, the stock is likely to maintain its strength, with potential to move towards 215, while support is placed at 197.
Buy ABREL 2192 TGT 2300 SL 2100
The stock has broken out of its previous consolidation on the daily chart, indicating increased optimism. Moreover, the trend remains strong, with the price trading comfortably above key moving averages. Additionally, the RSI has formed a bullish crossover, reinforcing the positive momentum. In the short term, the stock is likely to remain strong, with potential to move towards 2,300, while support is placed at 2,100.
Buy HINDCOPPER 238.10 TGT 255 SL 229
The stock has broken out of flag pattern on the daily chart, indicating increased optimism. Moreover, the trend remains strong, with the price trading above key moving averages. Additionally, the RSI has formed a bullish crossover and rising, reinforcing the positive momentum. In the short term, the stock is likely to remain strong, with potential to move towards 255, while support is placed at 229.
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