Markets have reached a phase where mid caps have started performing in a big way. For aggressive and active traders it means a lot of money can be made by churning stocks from one sector to another. For instance mid cap metal stocks have run up a lot while reality and banking have been quite for sometime. Today some momentum has finally come back to the reality stocks and it may be a good idea to look at some quality stocks in reality like Sobha Developers, India Bulls Real Estate, and Parasvnath etc. Similarly banking is another sector which can start participating in the rally moment the dreaded rate hike takes effect.
Also being a contrarian may be useful in these buoyant times. There are still plenty of sectors like Shipping, logistics, paper; textiles etc where either the movement in stocks has been minimal or there are plenty of stocks available at attractive valuations offering good upside potential and limited downside risk.
Hence money making season has certainly set in. Play musical chairs between different sectors and earn plenty of short term capital gains. However do remember to keep a stop loss on all your mid cap punts as they could fall a lot if the market sentiment was to turn negative. Also it may be useful to have a hedge position on the Nifty as any mid cap centric portfolio would, needless to say, be a high beta one.
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