Fear and uncertainty have gripped the Indian stock markets. The Nifty has recently slipped below the 23,300 level, reflecting the broader market's ongoing struggle amid unsettling news, including the recent Adani bribery reports.
However, there is a silver lining for readers looking beyond the broader market sentiment. Certain small-cap stocks are defying the odds and resuming their bullish momentum. These stocks are breaking out on the charts and showing strong potential to outperform the market soon.
On Tuesday, we highlighted three breakout stocks that help you beat the stock market selloff. Before we head to the stocks list, let us analyse the Nifty Smallcap 250 index chart.
The Nifty Smallcap 250 index, which tracks the performance of smaller companies, is currently at a crucial support level. The 200-day exponential moving average (200DEMA) channel, created by plotting the high and low values of the 200DEMA, has proven to be an effective indicator.
Over the past 18 months, this index has demonstrated remarkable, bullish opportunity, consistently bouncing back from the 200DEMA support and pushing higher. This trend suggests that small-cap stocks are positioned well to resume their upward trajectory despite the broader market's weakness.
With the Nifty Smallcap 250 index testing strong support levels, five small-cap stocks have shown impressive breakout patterns on their point & figure (P&F) charts. These stocks are poised to outperform the market and signal potential resumption in the bullish trends.
Amber Enterprises India Ltd (market cap around ₹22,000 crore)
Amber Enterprises is a leading player in the Indian air conditioning and refrigeration industry. It specializes in manufacturing and supplying a wide range of products, such as air conditioners, heat exchangers, and compressors. The company has positioned itself as a key supplier to major global brands, and its diversified product offerings have made it a major force in the HVAC (heating, ventilation, and air conditioning) space.
On the P&F chart, Amber Enterprises witnessed a significant breakout around the ₹4,800 level, followed by a strong rally above ₹6,000. The stock is now showing a Double Top Breakout (DTB), signalling the resumption of bullish momentum. With the stock convincingly breaking above the Rs. 6,500 mark, it has the potential to continue its upward trajectory as the bullish trend gathers steam.
Ami Organics Ltd (market cap around ₹8,600 crores)
Ami Organics is a prominent player in the speciality chemicals sector, providing a wide range of products used in pharmaceuticals, agrochemicals, and polymers.
The stock price saw a major breakout above Rs. 1,400 on the chart, signalling a potential long-term uptrend. The stock has followed a series of 45-degree trendlines, strengthening the bullish momentum.
Furthermore, the breakout from a 4-column triangle pattern confirms the resumption of the trend, indicating that Ami Organics has the potential to continue its bullish momentum and outperform the benchmark index.
Krishna Institute of Medical Sciences (market cap around Rs.23,400 crores)
Krishna Institute of Medical Sciences, commonly known as KIMS, is a leading healthcare services provider in South India. The company operates multi-speciality hospitals and offers various medical services, including emergency care, surgery, and oncology.
On the P&F chart, KIMS has experienced a double top breakout (DTB) followed by a solid 45-degree trendline, indicating the potential resumption of its bullish trend.
The stock is trading near its all-time high and outperforming the small-cap index with its strong fundamentals and technical indicators pointing towards continued upward momentum.
Kirloskar Brothers Ltd (market cap around ₹17,500 crores)
With over 100 years of experience, Kirloskar Brothers is a well-established engineering company specializing in fluid management solutions. The company designs and manufactures pumps, valves, and other mechanical products used in industries ranging from water supply to power generation.
On the P&F chart, the stock broke out of a triple top breakout (TTB) pattern, signalling a strong breakout from the resistance zone around ₹1,800. This was followed by another breakout at Rs. 2,100, indicating that the bullish trend is resuming. The chart signals further upside potential, making it an attractive small-cap stock to monitor.
Mastek Ltd (market cap ~ ₹9,900 crores)
Mastek is a leading global IT services and consulting firm that provides digital transformation solutions to clients across various sectors, including retail, banking, and insurance. The company is known for its expertise in cloud computing, data analytics, and enterprise resource planning (ERP), and its strong track record in executing large-scale projects has earned it a solid client base.
On the P&F chart, Mastek recently saw a breakout from a long-term trendline marked by a blue line, followed by a successful breakout from a TTB pattern. These signals suggest that the stock is resuming its bullish momentum and could potentially outperform the small-cap index.
The Nifty Smallcap 250 index is testing key support, and stocks like Amber Enterprises, Ami Organics, KIMS, Kirloskar Brothers, and Mastek are breaking out with strong technical setups that indicate the potential for sustained bullish trends.
It is important to monitor these stocks closely during market turmoil, as they may be among the few shining stars that can outperform the broader market trends.
For more such analysis, read Profit Pulse.
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
As per SEBI guidelines, the writer and his dependents may or may not hold the stocks/commodities/cryptos/any other assets discussed here. However, clients of Definedge may or may not own thesesecurities.
Brijesh Bhatia has over 18 years of experience in India's financial markets as a trader and technical analyst. He has worked with the likes of UTI, Asit C Mehta, and Edelweiss Securities. Presently he is an analyst at Definedge.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Definedge may or may not own thesesecurities.
