EIL, Sagility: Check why Bajaj Broking is bullish on these smallcap stocks

Pabitro Mukherjee of Bajaj Broking flags a bullish 'cup and handle' and 'falling trendline' breakout on these smallcap stocks Engineers India and Sagility on the charts.

The broader indices, smallcaps in particular, have outperformed the NSE benchmark Nifty 50 in August thus far on the back of selective buying post Q1 results.  The Nifty SmallCap, Nifty SmallCap 50 and Nifty SmallCap 250 have surged over 3 per cent each. In comparison, the Nifty Midcap and Nifty MidCap 150 advanced over 1 per cent each, while the Nifty 50 index was down 0.5 per cent this month.  "Companies reporting good results and good forward guidance are being bought by investors- retail as well as institutions- even at high valuations. Since there is no significant floating stocks in most of these stocks in the broader market, the rally is sharp," V K Vijayakumar, Chief Investment Strategist, Geojit Investments highlighting the broader market outperformance.  Against this background, Pabitro Mukherjee, Deputy Vice President - Technical at Bajaj Broking identifies two smallcap stocks that look favourably placed on the charts.  Here's a technical outlook on Engineers India (EIL) and Sagiliti by Bajaj Broking.  Engineers India (EIL)  Buy Range: ₹240-245  Target Price: ₹265  Stop Loss: ₹228  Time Horizon: 3 months 

 

 

  Engineers India is at the cusp of generating a breakout above a bullish 'Cup and Handle' formation on the weekly chart, highlights Pabitro Mukherjee of Bajaj Broking.  The analyst reckons this breakout will signal a positive bias and offer a fresh entry opportunity. Adding that, the base of the entire consolidation was placed at the 52-week Exponential Moving Average (EMA), signalling strength and an overall positive bias.  Going forward, Mukherjee expects the stock to head toward ₹265 in the coming months, which was the high of May and June 2026. On the downside, the analyst sees immediate support at ₹230-235 levels, which is the confluence of the 50-day EMA and the trendline support joining recent lows.  "The weekly 14-period Relative Strength Index (RSI) generated a 'Buy' signal after moving above its 9-period average, which validates the positive bias," explains Mukherjee. 

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  Sagility  Buy Range: ₹42-43.50  Target Price: ₹47  Stop Loss: ₹40  Time Horizon: 3 months 

 

  Sagility is showing buying demand emerging after a base at the 50-day EMA and the trendline support joining previous major lows of the last five months, says the analyst from Bajaj Broking.  Mukherjee highlights that a key observation in the chart is that the stock generated a breakout above a falling supply line joining the recent highs signalling strength.  Going forward, Mukherjee expects the stock to head toward ₹47 levels, which is the previous major breakdown area and 50 percent retracement of the entire previous decline (₹58-36).  "Supporting the positive view, the daily 14-period RSI has flashed a 'Buy' signal after crossing above its 9-period average, indicating improving momentum in the stock," explains the analyst.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.