Tremendous Action in Banking and Financial Stocks is being seen and Zee Business Managing Editor Anil Singhvi has said that after strong movement in Large cap stocks, now money will be made in Midcap and Small cap stocks. However, he warned investors to stay away from weak quality stocks.
बैंकिंग और फाइनेंशियल शेयरों में जबरदस्त एक्शन…
— Zee Business (@ZeeBusiness) December 9, 2020
The Market Guru said that since markets are extremely strong at this stage, investors are scouting for fresh ideas and to invest there. Now they are focusing on stocks that have not moved in spite of strong fundamentals and companies that are available at decent valuations which can give good returns from here on. Also, investors are keeping an eye on companies that are trading near their 52-week low or at 52-week lows.
There are lot of stories or ideas in the market at current stage; investors are deploying money in the theme they believe will do well. Large cap stocks have seen tremendous rally along with the upmove in Nifty, it seems now broader market will participate in the market action going forward.
Midcap and Small cap stocks seem to be in good traction at this stage of the market. It is possible that some Small cap stocks may move 25% to 50% in one week, but participants should understand they should trade in stock and exit quickly. They should not remain invested in these companies. By trading in small caps, some participants can make decent returns in few days. Since the market momentum is strong, one should take advantage by trading in Midcap and Small cap theme.
It is important to study the reversal pattern in the market to avoid losses; participants should buy into good quality companies and should discard companies which are not good. Participants should avoid companies with promoter issues, Balance Sheet concerns and Corporate Governance issues. These stocks would be available at discount but participants should not invest in these garbage / rubbish companies.
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Good quality small cap companies are available in the market at lower valuations currently. After strong move in Large cap and Midcap companies, participants should take advice from professionals or experts before investing in Small cap companies.