These 6 largecaps turned midcap in 2018; what should you do now?
SEBI's reclassification rule and additional surveillance measure where stocks are put under the scanner for suspected manipulation also weighed on sentiment
Indian markets went through a rough patch in the first six months of 2018 but managed to recoup their losses in July, with the Sensex hitting a fresh record high led by a rally in large-cap stocks.
But the rally was not broad-based and six stocks which were considered large-caps in 2017 became midcaps in 2018 going by the recent classification changes brought in by market regulator SEBI.
According to data compiled from AceEquity, six stocks whose average market capitalization for the last six months (January-June) slipped below the Rs 30,000 crore mark compared to average map recorded in the second half of 2017 (July-December 2017).
Six stocks which turned midcaps include TVS Motor Company, ACC, Punjab National Bank, LIC Housing Finance, Rural Electrification Corporation and Power Finance Corporations.
SEBI's reclassification rule and additional surveillance measure (ASM) where stocks are put under the scanner for suspected manipulation also weighed on sentiment.
Apart from regulatory headwinds, high valuations, concerns regarding corporate governance, global headwinds in terms of a trade war and crude oil prices, fall in the rupee-dollar and slower-than-expected economic growth weighed on Indian markets, especially midcaps and smallcaps.
From January 2018 to till date we have seen the stock to correct and retrace almost 50 percent of the upside rally making multiple bottoms around Rs 540.
For the last 8-10 weeks, the stock is moving sideways in the range of Rs 540-600 and a breakout on the higher side will give further upside rally till Rs 750-800.
Traders can hold the stock for the next 6-12 months for the upside level of 750-800 with downside level of Rs 500. A close below Rs 500 could result in a correction to Rs 450-420.
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