Nifty Struggles Amid Adani Bribery Reports, But Small Caps Show Bullish Signaling
Mumbai, Maharashtra - India's stock market declined further on Wednesday, as investors grew increasingly uneasy amid growing concerns surrounding a major business group involved in several high-profile bribery scandals.
The Nifty 50 index slid below the crucial level of 23,300 on Tuesday, reflecting the broader market's struggle to find footing as investors grappled with news of alleged wrongdoing by Adani Group chairman Gautam Adani and his associates. Although the news has left many bulls feeling anxious about a potential downturn, there are some small-cap stocks that appear to be bucking the trend.
According to analysts at Definedge Securities, certain small-cap stocks have started showing signs of bullish momentum on their point-and-figure (P&F) charts. These indicators are suggesting that an uptrend may resume in these groups soon.
Nifty Smallcap 250 Chart Indicates Strong Support
The Nifty Smallcap 250 index, which tracks the performance of India's smaller companies, has hit a crucial support level recently. The 200-day exponential moving average (200DEMA) channel on this chart has proven to be an effective indicator in predicting bounces or breakdowns in the group's trend.
In the past 18 months, this index has experienced some remarkable bullish opportunities, consistently rebounding from support and pushing higher whenever the market got a reprieve. This suggests that smaller companies have been positioned well to resume their upward trajectory despite broader market weakness.
Five Breakout Stocks Show Potential for Resumption of Bullish Trends
Based on P&F chart analysis, five small-cap stocks are currently showing impressive breakout patterns that may signal potential long-term upside for these companies. These include:
Amber Enterprises India Ltd, the air conditioning and refrigeration company with a market capitalization of around ₹22,000 crore; Ami Organics Ltd, the speciality chemicals group with a market capitalization of around ₹8,600 crores; Krishna Institute of Medical Sciences (KIMS), a major healthcare services provider in South India, valued at ₹23,400 crores, and also having a significant market capitalization; Kirloskar Brothers Ltd, an engineering firm specializing in fluid management solutions with a market capitalization of around ₹17,500 crores; and finally Mastek Limited, a leading global IT consulting firm.
These five stocks appear to be taking advantage of the current market turmoil by showing strong potential for sustained growth. In our previous article, we mentioned two other stocks whose performance has also caught some investors' attention during current markets condition:
Nifty falls below ₹17,000 due to market-wide risk-off, RBI keeps rates steady.
However, these stocks could be further watched closely by investors. As the overall broader market trend remains a constant threat for the Indian stock market ecosystem, small-cap stocks might face challenges during challenging times.
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