After underperforming in 2011, Indian equities have outperformed its global peers in 2012 year-to-date. Initially, the rally was limited to large caps. However, over the past 3 months, small and mid cap stocks (a jump of 17% in CNX Midcap) have recorded smart gains. Likelihood of continued Government action (most recent being passing of opening of FDI in retail in Lok Sabha) and a supportive global sentiment is expected to trigger further upside in the stock market. A possible cut in CRR in the upcoming RBI policy meet and Repo cuts from January 2013 are added triggers which can further accentuate the current momentum. Based on our reading of charts, the Nifty appears headed towards the 6,400 mark, which implies 8.5% upside from current level. We believe midcaps could rally even more, possibly 15-25 in case of many companies. We recommend 9 midcap ideas based on technical analysis.
We have categorized our picks into the following three buckets based on technical indicators:
|I||Momentum trades||JB Chemicals, Divis Labs, Shriram Transport, IB Real Estate|
|II||Bottom fishing ideas||Adani Enterprises, Punjab & Sind Bank, Phoenix Mills|
|III||Defensive bets||DCB, Vijaya Bank|
|Stock||Reco Price||Target||SL||Exp. Returns (%)|
|IB Real Estate||75||89||65||19|
|Bottom Fishing Ideas|
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