Nifty Surpasses 24,000, Midcap and Smallcap Stocks Gaining Focus

Market Outlook: Broader Indices Poised to Extend Outperformance

The broader indices are well-placed to extend their outperformance in the near term, according to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. The Nifty Midcap 100 has displayed a strong setup, trading above all its key short-term and long-term moving averages.

The Nifty Midcap 100 has been consistently outperforming the benchmark Nifty over the past few weeks, with a sharp weekly gain of over 7 percent. This trend is reflected in its relative strength (ratio) chart against the Nifty, which continues to form a clear sequence of higher tops and higher bottoms, indicating sustained relative strength and improving risk appetite.

Comparison of Weekly Performance

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The Nifty Smallcap 100 has also shown bullish momentum, with its daily RSI already placed above the 60 level and continuing to trend higher. The broader indices have outpaced the headline indices, with both the Nifty Midcap 100 and Nifty Smallcap 100 rising over 7 percent each and forming strong bullish candles.

The benchmark index Nifty staged a strong pullback rally over the past week, closing above the 24,000 mark with a gain of 5.89 percent. This rally has been supported by a clear improvement in market participation, with market breadth expanding significantly, reflecting widespread buying interest across sectors.

Technical Indicators

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The momentum indicators are also turning favorable, with the daily RSI climbing back to around 54 and trading above its 9-day average. The MACD histogram shows a pickup in positive momentum.

Stock Recommendations

Sudeep Shah recommends accumulating Nippon Life India Asset Management and Cummins India for the next week.

• Nippon Life India Asset Management: Accumulate in the zone of Rs 960-950 with a stop-loss of Rs 910. Potential upside target: Rs 1,030.
• Cummins India: Accumulate in the zone of Rs 5,140-5,100 with a stop-loss of Rs 4,980. Potential upside target: Rs 5,500.

The rally is expected to continue in Adani Energy Solutions, Siemens, and Lenskart Solutions next week.

• Adani Energy Solutions: As long as the stock holds above the Rs 1,090-1,085 support zone, the uptrend is likely to remain intact, with potential for further upside in the near term.
• Siemens: A sustained move above the current resistance zone, supported by strong volumes, could trigger the next leg of the rally.
• Lenskart Solutions: If the stock sees follow-through buying from current levels, it is well-positioned to extend its upward move in the coming sessions.