Manappuram, MGL: Select small-cap stocks are poised for bigger upside

Selective small-cap stocks may rally up to 22 per cent in coming months, show technical charts

Benchmark indices, the BSE Sensex and Nifty 50, have remained directionless in recent sessions, but selective small-cap stocks have held their positive trend firmly. While the uncertainty continues to haunt the trading community, with volatility dampening their confidence, shares such as Manappuram Finance, Bharat Dynamics, IDFC, Mahanagar Gas and KPIT Technologies continue to see accumulation near their respective key levels.

Shares of KPIT Technologies have hit new historic peak of Rs 913.90 a few sessions ago, while IDFC shares touched a new 52-week high this month. 

Mahanagar Gas and Manappuram Finance are not letting recent up move to perish. Both the stocks trade firmly over their respective 200-day moving average (DMA). Likewise, Bharat Dynamics managed to absorb all the sell-off despite broader weakness.

On Wednesday, shares of Mahanagar Gas soared 2.33 per cent, while Bharat Dynamics and KPIT Technologies  gained over 1 per cent each. Other two stocks, Manappuram Finance and IDFC witnessed a sluggish trade. 
 

Here’s the technical outlook for selective small-cap stocks:-

Mahanagar Gas Ltd (MGL)

Likely target: Rs 1,100

Upside potential: 21%

A “Flag pattern” formation on the daily chart of Mahanagar Gas could breakout once the hurdle of Rs 980 is surpassed. This shall trigger fresh upside in the direction of Rs 1,100 levels, its next critical hurdle, as per the daily chart.

Until the stock falls beneath key mark of Rs 920, the horizontal support mark, the upside bias shall prevail. While both the technical indicator, Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) have formed a bearish crossover, the price action is not letting selling pressure to dictate. CLICK HERE FOR THE CHART

KPIT Technologies Limited (KPITTECH)

Upside potential: Rs 1,200

Likely target: 22%

The broader trend in the shares of KPIT Technologies points to a directional uptrend. And this could rise until the support of Rs 750 is protected.  The present candlestick formations are hinting a rally to Rs 1,200 levels. 

The immediate support for the stock falls at Rs 840 and Rs 820 level, as per the daily chart. Every healthy decline is anticipated to witness accumulation hereon. CLICK HERE FOR THE CHART

Manappuram Finance Limited (MANAPPURAM)

Upside potential: Rs 145

Likely target: 20%

The “Inverse Head and Shoulder” pattern is in the developing stage and once the formation results in a breakout, the stock is likely to rally in the direction of Rs 145, as per the daily chart. The momentum indicator, MACD has already confirmed a strong trend post rising over the zero line.

A breakout over Rs 120 shall trigger fresh up move. This breakout could steer a medium-term upside in the stock. As of now, the immediate support falls at Rs 110, which must be adhered on the closing basis. CLICK HERE FOR THE CHART

Bharat Dynamics Ltd (BDL)  

Upside potential: Rs 1,200

Likely target: 20%

The stock is witnessing selling pressure near Rs 1000 mark since November last year. Once this hurdle is cleared, the stock chart pattern could see a rise towards Rs 1,200.

While the current trend looks sluggish, the counter has seen accumulation near Rs 800 levels. The immediate support comes to Rs 850-mark and a close over Rs 950 may steer a sharp up move over Rs 1,000 levels. CLICK HERE FOR THE CHART

IDFC Limited (IDFC)

Upside potential: Rs 87

Likely target: 12%

IDFC shares are a slow runner, but they are not afraid of any barriers.  The stock has outperformed by soaring over 2.50 per cent, in comparison to 2 per cent decline in the benchmark indices. The crucial support for the stock comes to Rs 74.40, which is its 100-DMA. 

Thus, unless the support of the 100-DMA is violated, the trend is likely to see higher levels of Rs 87, as per the daily chart.  CLICK HERE FOR THE CHART