Midcap Trades: Express Idea

India Infoline News Service | Mumbai |

After underperforming in 2011, Indian equities have outperformed its global peers in 2012 year-to-date. Initially, the rally was limited to large caps.

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:

Category Action advised Stocks
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
 
Recommendation
Stock Reco Price Target SL Exp. Returns (%)
         
Momentum Trades        
J.B. Chem 86 98.5 75.5 15
Divis Labs 1162 1320 1120 14
IB Real Estate 75 89 65 19
Shriram Transport 691 750 640 9
         
Bottom Fishing Ideas        
Adani Ent 249 275 232 10
Phoenix Mills 233 300 195 29
PSB 72 81 66 13
         
Defensive Bets        
DCB 47 55 42 17
Vijaya Bank 61 71 51.5 16
 
 

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