The momentum might have slowed down but nearly 100 stocks from the S&P BSE 500 index hit fresh record highs in the month of July which most experts say could be your winning bets.
The Nifty50 has fallen 124 points from its record high of 10,137.85 recorded earlier in the month of August after a strong 5 percent rally seen in the month of July.
The momentum might have slowed down but nearly 100 stocks from the S&P BSE 500 index hit fresh record highs in the month of July which most experts say could be your winning bets.
The momentum has slowed down but history suggests that correction in the market has not lasted for more than 200 points in the past. If the index closes below its 13-DEMA and 20-DEMA convincingly, further correction cannot be ruled out in that case.
The momentum might have slowed down but nearly 100 stocks from the S&P BSE 500 index hit fresh record highs in the month of July which most experts say could be your winning bets.
The momentum has slowed down but history suggests that correction in the market has not lasted for more than 200 points in the past. If the index closes below its 13-DEMA and 20-DEMA convincingly, further correction cannot be ruled out in that case.
The index might be going through consolidation but the good news is that there was lot of stock specific action which was seen in the month of July as nearly 100 stocks rose to fresh all-time highs which include names like Eicher Motors, Page Industries, Maruti Suzuki, RIL, HDFC Bank, Avanti Feeds, IndusInd Bank, ACC, Yes Bank, VST Industries, Kotak Mahindra Bank, etc. among others.
“It undoubtedly makes sense to hold stocks in the portfolio which have hit record highs provided they are backed by core business fundamental which supports a growth prospectus,” Dinesh Rohira, Founder & CEO, 5nance.com told Moneycontrol.
“Given that a current rally in the market is partly driven by excess liquidity despite a marginal growth in earnings, an investor should remain caution towards this euphoria,” he said.
Analysing quarterly performance of companies can be used as an add-on filter before making an investment decision, suggest experts.
“If on the quarterly basis their performances are good and have already given significant upside, one should not mind entering at high because the upside is very much justified,” Abnish Kumar Sudhanshu, Technical Analyst, Aadya Commodities Pvt. Ltd told Moneycontrol.
“I would advise investors to observe the quarterly performance and also focus on the future growth trajectory. We advise investors to look to enter in Kotak Mahindra, Voltas, Piramal Enterprise, Maruti, and Hindalco etc.,” he said.
Before making an investment decision, investors should analyse the company’s fundamentals on the basis of business outlook, revenue track record as well as demand environment.
The stock specific action is likely to continue as benchmark indices might stay in a range. But, investors should remain watchful of the stocks they want to put fresh money while in some case it makes sense to book partial profits.
“While expensive valuations (post sharp run-up) warrant a re-evaluation of the fundamentals of companies, it should be noted that the quality companies with a moat in terms of brand, market leadership, and capital efficiency, always command premium multiples,” Pankaj Pandey, Head-Research, ICICI Direct told Moneycontrol.
“These premium multiples, therefore, should be seen in conjunction with reasonable growth visibility and strong balance sheets that these companies have,” he added.
Pandey further added that if the investment thesis and growth visibility is in line with expectations for a quality company, one should stick with such companies. Otherwise, one can book profits where current levels have priced in most of the growth.
Investing in small & midcap space:
Among the small and midcap names, stocks which have hit fresh record highs last month include names like Manappuram Finance, Rain Industries, Jindal Stainless, Gayatri Projects, NBCC, JSW Steel, Chambal Fertilisers, Sterlite Technologies and Apollo Tyres etc. among others.
Mid cap and small cap investing have always been a bottom up phenomenon rather being a top down approach. The S&P BSE 500 index has most of the top quality stocks across largecap, midcap as well as smallcaps.
“While it is difficult to gaze through quality names the focus needs to be sticking with quality business models with superior return on capital over a sustained period of time,” Pandey of ICICI Direct said.
“We believe that people need to be cautious while downgrading in quality. We continue to advise that comfort over management, business model, growth visibility and sustainability is a key in midcap investing,” he said.
“It undoubtedly makes sense to hold stocks in the portfolio which have hit record highs provided they are backed by core business fundamental which supports a growth prospectus,” Dinesh Rohira, Founder & CEO, 5nance.com told Moneycontrol.
“Given that a current rally in the market is partly driven by excess liquidity despite a marginal growth in earnings, an investor should remain caution towards this euphoria,” he said.
Analysing quarterly performance of companies can be used as an add-on filter before making an investment decision, suggest experts.
“If on the quarterly basis their performances are good and have already given significant upside, one should not mind entering at high because the upside is very much justified,” Abnish Kumar Sudhanshu, Technical Analyst, Aadya Commodities Pvt. Ltd told Moneycontrol.
“I would advise investors to observe the quarterly performance and also focus on the future growth trajectory. We advise investors to look to enter in Kotak Mahindra, Voltas, Piramal Enterprise, Maruti, and Hindalco etc.,” he said.
Before making an investment decision, investors should analyse the company’s fundamentals on the basis of business outlook, revenue track record as well as demand environment.
The stock specific action is likely to continue as benchmark indices might stay in a range. But, investors should remain watchful of the stocks they want to put fresh money while in some case it makes sense to book partial profits.
“While expensive valuations (post sharp run-up) warrant a re-evaluation of the fundamentals of companies, it should be noted that the quality companies with a moat in terms of brand, market leadership, and capital efficiency, always command premium multiples,” Pankaj Pandey, Head-Research, ICICI Direct told Moneycontrol.
“These premium multiples, therefore, should be seen in conjunction with reasonable growth visibility and strong balance sheets that these companies have,” he added.
Pandey further added that if the investment thesis and growth visibility is in line with expectations for a quality company, one should stick with such companies. Otherwise, one can book profits where current levels have priced in most of the growth.
Investing in small & midcap space:
Among the small and midcap names, stocks which have hit fresh record highs last month include names like Manappuram Finance, Rain Industries, Jindal Stainless, Gayatri Projects, NBCC, JSW Steel, Chambal Fertilisers, Sterlite Technologies and Apollo Tyres etc. among others.
Mid cap and small cap investing have always been a bottom up phenomenon rather being a top down approach. The S&P BSE 500 index has most of the top quality stocks across largecap, midcap as well as smallcaps.
“While it is difficult to gaze through quality names the focus needs to be sticking with quality business models with superior return on capital over a sustained period of time,” Pandey of ICICI Direct said.
“We believe that people need to be cautious while downgrading in quality. We continue to advise that comfort over management, business model, growth visibility and sustainability is a key in midcap investing,” he said.
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