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Thursday, November 29, 2012

The Great Indian Midcaps Sale!

Midcap stocks in Indian markets are currently available with heavy discounts in what is now known as "The Great Indian Midcap Sale" !! Not only Midcaps, but most Smallcaps and Microcaps, are available at a steep discount to their intrinsic Book Value and and in some cases, sale is as high as 50%, 60% or even more!

This is not the case in mainline Nifty50 stocks and BankNifty index, which are nearing their all time highs and will surpass that mark very soon. Lets look at some charts and compare...

Looking at Nifty50 chart, which has top 50 stocks of the Indian market, Nifty Index has crossed 5800 today and is only about 10% shy of its all time high of 6300 mark. 5950 and 6200 are the only nearby resistance levels and few good weeks of Nifty movement will take Nifty in uncharted territory of beyond 6300 mark!

BankNifty is no laggard! BNF, as this index is commonly called, has surpassed 12,000 mark and is only 10% away from its all time high of 13,300 mark. 12000 itself is a decent resistance level, and another few good days, if so happens, would propel this volatile index to move to newer grounds.

Now, lets have a look at the poor man's index. Or the Midcap Index, which is a huge laggard in current upmove.

Midcap index is at 2200, where its again facing a decent resistance currently. It is a far cry away from its top of 3200, which came at the same time as NF and BNF peaked. Currently the index is 31% away from its peak and hence is available at deep discount in comparison to NF, BNF or even if one looks at it in isolation.

So, clearly Midcaps and Smallcaps are the places one needs to look to hunt to deep value. Most of the Midcap players are trading below their Book Values and hold key to decent gains in the next few quarters to come.

Thanks for reading this article and keep writing in to us.


  1. Hello Naren,

    I came across your blog 2 days back and i have already gone through most of your post.
    I like your work very much. Its very clean information.
    I would like if you could suggest the good stocks that you have talked about above.

  2. Thanks Vaibhav. You can look at Model PortFolio here

    I also try to add new stocks every week, so keep visiting and keep writing in. Thanks.

  3. Hello Naren,

    Thanks for your quick reply.
    what is your view on Apcotex Industries in near to medium term?



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