September 23, 2016

Smallcap Indices in All Time Highs and Outperforming Nifty!! Time to be Cautious and Selective !!

Nifty has done a strong move since the bottom in February 2016 at 6850-7000 where a lot of people on the street were sure about 6400.

We did expect a sharp bounce like it did in 2012. Some old posts mentioning it.

Although i expected a lot of resistance to come in at 8000-8300 but we have taken that out with ease and even digested events like Brexit.

Technically there is no reason to doubt the trend till 8540 is taken out. But the previous top at 9000-9100 should be a stiff resistance. Also a correction after such a rally is fine and it could also be timewise where markets remain sideways in a range for quite a few months.

Conclusion - Nifty is in a strong trend but a timewise correction is possible in coming months. Price wise can be confirmed post a dip below 8540.

Now comes the part which is a bit uncomforting is the solid rally by smallcaps/midcaps and micro caps. Also being focused on smallcaps/midcaps it has been a good enough time. But the moves have now shifted to stocks which are highly illiquid and seeing sudden bursts of 20-50% moves.

One of the reasons there has been not much update is I have been busy trading/recommending the microcaps/smallcaps as well as any mention of an illiquid name can make the stocks go dizzy in such conditions. Hopefully the action shifts to liquid large caps or midcaps and i ll get to update more. Focusing on Pharma/Fmcg sector.

Whenever I find myself trading a lot of microcaps i do get a bit uneasy making that quick money. The last time I got this uneasy did not end well for the markets in next 2 months. Was just a lucky timing as I did not act enough myself but luckily discipline helped.

Read more at http://www.nooreshtech.co.in/2016/09/smallcap-indices-in-all-time-highs-and-outperforming-nifty-time-to-be-cautious-and-selective.html

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