April consolidation period for mid, smallcaps: Malkan

Vishal Malkan of Malkansview.com, says “we are done with the lows, but that does not mean it will go and have a perpendicular rally in the next few days. After a bottom is made, typically every stock or sector does some consolidation before it is ready for the next big move. So, April will be a consolidation period for midcaps and smallcaps.”



It looks like a lacklustre day of trade. Do you expect Nifty to remain range-bound at least till the expiry now?

Vishal Malkan: Yes, I guess we had huge volatility in the last few trading sessions. But since the last couple of trading sessions, it has halted. Around 20-21st of March was an important date and that is when the market made a bottom at around 21,800. So, the range between 22,000 and 22,300 is a good for the next few days. But stock specific, there can be good returns if you go stock specific or sector specific.

Stock specific, after a very long period of subdued moves, we are seeing such a move in Dr Lal PathLabs. It is up around 5 odd percent. How are you seeing this stock technically on charts? Are you seeing more upside here?

Vishal Malkan: Yes, pharma stocks have done well in the last few sessions. But Dr Lal PathLabs has been doing well since the last five days and it is like a perpendicular rise. I would like to see a small dip before we get into it because otherwise the risk-reward ratio might not fit into it. So, I look to buy around 2180-2200 before I get into this stock as a buy position.

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Apart from that, the Nifty IT index has been weak for a couple of days now. Obviously after the Accenture result, we are seeing this weakness coming in. Do you expect this weakness to sustain for at least a month now?

Vishal Malkan: For a couple of weeks or even three-four weeks, the IT index should remain subdued based on the actions and the patterns which are formed on weekly charts. So, maybe another 3-4% dip is expected. I will look for that support before I get into IT stocks as a buy.

When it comes to the PSU basket, we have seen a lot of volatility. How are you looking at this basket?

Vishal Malkan: I like the main part of PSUs like the PSU banks which are my favourites. Canara Bank and PNB are my top two stocks for this year, which have done well so far but I think there is much more steam left. So, every dip or every support is a good buy for Canara Bank and PNB.

When it comes to the mid and smallcap, today we are seeing some kind of recovery in both the indices but over the next one month or two, how are both the indices looking like? Do you think the fall that we had seen in both mid and smallcap space is done with now?

Vishal Malkan: I think we are done with the lows, but that does not mean it will go and have a perpendicular rally in the next few days. After a bottom is made, typically every stock or sector does some consolidation before it is ready for the next big move. So, April will be a consolidation period for midcaps and smallcaps.

William Murphy

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