Bajaj Consumer, HEG, Dish TV among small-cap buy candidates on the charts

Stock markets

Indian Market
by 5paisa Research Team Last Updated: 2022-09-06T14:03:34+05:30

The Indian stock market is consolidating after a sharp bounce that was preceded by a deep correction over the last three months. Although the benchmark indices have struggled to make a breakout and attain the all-time peak of last year, they seem to be taking a breather before a new push.

Investors looking at charts and price and volume patterns have various parameters to decide whether a stock is ripe for the pick or is showing signals of weakness and is best left untouched.

We picked a metric called Williams %R, which is a momentum indicator that can signal bullish or bearish trends for a stock.

Developed by Larry Williams, Williams %R is the inverse of the Fast Stochastic Oscillator. Its reading varies between 0 and -100, with 0 to -20 indicating an overbought range and -80 to -100 being seen as an oversold zone.

We ran an exercise to see which small-cap stocks are in the bullish zone as per Williams %R. In particular, we looked at stocks with market cap of under Rs 5,000 crore, with the William %R just crossing over -80 mark from the previous score at that level. We spotted over 100 such stocks which could be set for a trend reversal.

Filtering them from the top end of their market cap, we get names like HEG, FDC, Himadri Speciality, Gujarat Pipavav Port, Dhani Services, Hikal, Action Construction, Ganesh Housing Corp, Dish TV India, Indo Count Industries and Anant Raj.

Lower down the order there are companies like Ahluwalia Contracts, Arvind, HIL, Butterfly Gandhimathi, Eveready, HBL Power, Cantabil Retail, Gulf Oil Lubricants, Bajaj Consumer Care, Greenply, Gufic BioSciences, Gravita, Amrutanjan Health, Gokaldas Exports, HCC and Gati.

In the penny stock pack with stock price of under Rs 20 there are companies like GTL, Future Enterprises, Aksh Optifibre, Ansal Properties, Gayatri Projects, Dhanlaxmi Bank, Future Consumer and HCL Infosystems.

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