Smallcap Stocks: Brokerage firm Emkay said that since 2020, the Nifty Smallcap space has exhibited a clear cyclical pattern of bottoming out around March, with these phases often followed by strong upside moves, indicating recurring shifts in liquidity and risk appetite. In line with this trend, Mar-26 has once again seen a revival in momentum, supported by improving price structure, broader participation, and strengthening relative performance vs the benchmark.
In this context, brokerage Emkay Global Financial Services has also shared some of its top stock picks backed by technical indicators and market data.
Breaking It Down
Powered via AIRelative rotation and ratio charts also indicate potential outperformance potential in the smallcap segment, though sectoral dispersion remains visible.
Overall, the broader setup remains constructive with a bullish bias. The 8,500-8,900 zone is acting as an accumulation band, and a sustained move above resistance levels will be crucial to validate continuation of the prevailing uptrend.
Since 2020, March has served as a cyclical bottom in 6 out of 7 instances, followed by strong upside moves, indicating shifts in liquidity and rising risk appetite.
March 26 also shows early signs of bullish momentum, supported by an improving price structure and participation.
- Higher-low formation within a rising trend – broader strength intact
- Prices near contracting triangle resistance – potential breakout setup
- Trendline support respected – sustained accumulation visible
Momentum and relative strength
- RRG indicates strong momentum in smallcaps
- Smallcap vs Nifty ratio shows early sign of outperformance
- Broad-based participation across sectors
Strategy and levels
- Accumulation Zone: 8,500-8,900
- Resistance: Near breakout zone (pattern high) 9000
- Support: Trendline base zone 8,200
Smallcap vs Nifty: Which One is Ahead?
According to the report, the Smallcap index could outperform the NIFTY 50 going forward. Both the Relative Rotation Graph (RRG) and ratio charts indicate that smallcap stocks may continue to outperform in the coming period. However, the rally is not uniform across sectors, with some sectors leading while others continue to lag.
Emkay’s Top Stock Picks
- Buy Range: Rs 300-309
- Stop Loss: Rs 285
- Target: Rs 385
The brokerage said the stock is witnessing a breakout from a 16-year base formation, signalling long-term bullish momentum.
- Buy Range: Rs 206-216 (Current Price: Rs 215)
- Stop Loss: Rs 198
- Target: Rs 268
The stock is showing potential for further upside following a breakout after 10 years.
- Buy Range: Rs 495-517 (Current Price: Rs 529)
- Stop Loss: Rs 475
- Target: Rs 625
The stock has given a trendline breakout, indicating a strong uptrend.
- Buy Range: Rs 1,075-1,111 (Current Price: Rs 1,125)
- Stop Loss: Rs 1,020
- Target: Rs 1,300
The brokerage expects medium-term bullishness after a base breakout in the stock.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
