Monday Watchlist: Nifty above 26,000 – Uptrend or trap? Small caps steal spotlight; DLF, Godrej Prop and 5 stocks in focus |
A close above 26,000 on Friday appears to have given the much needed confirmation that Nifty is on the path of a sustainable uptrend. How far can we take this on face value, or do we need to look at the undercurrents as well to check how broad based this trend is, so that there will be more legs to the rally?
One of the reasons for this doubt is that Nifty’s recent rise has been courtesy just a handful of its constituents. Another reason is that what began as a Nifty-centred uptrend never quite translated into a small- and midcap rally as hoped, with the lag continuing to persist.
While the lag between large- and small cap stocks persists, that has not dissuaded money from flowing into such stocks. In an encouraging signal, November’s AMFI data shows that small-cap-themed mutual fund schemes attracted Rs 4,407 crores, when compared to just Rs 1,640 crores into large caps. It follows that retail money has begun to take a risk-on approach, even as FIIs continue to sell.
Friday’s positive close evoked both hope and concern, as previous Friday had also closed similarly in the green, only to give away all the gains in the subsequent days. What appears different this time is the number of small and midcap........