These five small-cap stocks may rally up to 45% in the medium-term

CDSL and NBCC have doubled so far this year, while Trident and JK Lakshmi Cement have gained 91 per cent each during the same period

The investor interest in the smallcap space continues to be strong, reflects the recent movement in the BSE Smallcap index. The index, which scaled a fresh all-time high of 26,167.95 earlier on Monday, has managed to outperform the benchmark S&P BSE Sensex with a rally of 44 per cent in the current calendar year, as against a rise of 11 per cent in the index.

While analysts believe the outlook for the broader market is likely to be good going forward, they believe investors must temper their returns expectations as a repeat of last year’s rally is unlikely in the immediate future. READ HERE

Despite this, tech charts are signalling good upside potential for five stocks - CDSL, NBCC, JK Lakshmi, Trident and Edelweiss Financial - despite a breathtaking rally so far this year. CDSL and NBCC have nearly doubled this year whereas the likes of Trident and JK Lakshmi Cement are close to doubling, having gained 91 per cent year-to-date (YTD). At the same time, Edelweiss Financial Services is trailing with a gain of 35 per cent. 

Here's a look at what technical indicators are suggesting for these stocks:

NBCC (India) Limited (NBCC)
 

Likely target: Rs 70 to Rs 80
 

Upside potential: 29% to 45%

The formation of "Inverse Head and Shoulder" has given a breakout, with a move heading towards Rs 70 and Rs 80 levels. The Moving Average Convergence Divergence (MACD), which has managed to sustain above the zero line, is continuously directing upward bias. The volumes on the breakout and follow-up scenario suggest positive interest by market participants, as per the weekly chart. The support for the stock stays at Rs 45 levels. CLICK HERE FOR THE CHART

Central Depository Services (India) Limited (CDSL)         

Likely target: Rs 1,250 to Rs 1,400 

Upside potential: 15% to 30%

With a "Higher High, Higher Low" formation, the price action is not showing any weakness as it is led by strong volumes. Although, there are negative divergences in the daily chart, the overall trend is heading towards Rs 1,250 and Rs 1,400 level. The support stays at Rs 950 levels on a closing basis. CLICK HERE FOR THE CHART

Trident Limited (TRIDENT)

Likely target:  Rs 23 to Rs 25

Upside potential: 27% to 38%

The weekly chart shows a breakout of a "Flag Pattern", suggesting firm upside in the coming months. Further, a "Golden Cross" of 50-days moving average (DMA), 100-DMA with 200-DMA indicates positive sentiment for the stock from a medium-term perspective. As long as the stock sustains above the support of Rs 12 levels, the bias may see a rally towards Rs 23 and Rs 25 levels. CLICK HERE FOR THE CHART

JK Lakshmi Cement Limited (JKLAKSHMI)

Likely target: Rs 780 to Rs 850

Upside potential: 20% to 31%

The long-term outlook for the counter indicates a rally towards Rs 780 and Rs 850 levels, as per the monthly chart. This can be on the back of a major breakout above the Rs 550-mark that was supported by follow-up buying. The immediate support for the stock comes at Rs 600, which needs to be considered on a closing basis, as per daily and weekly configuration. CLICK HERE FOR THE CHART

Edelweiss Financial Services Limited (EDELWEISS)

Likely target: Rs 120

Upside potential: 30%

The current breakout above Rs 91 levels, supported by firm volumes, shows a fresh upmove is likely in the stock as per the tech chart. The stock is heading towards Rs 120 levels, as indicated by the price action while immediate support comes at Rs 85 and 81 levels. CLICK HERE FOR THE CHART