Good Times Ahead for Smallcaps??? / Weekly TechnoFunda Breakouts- Hindalco, Somany Ceramics & Sunflag Iron

November 17, 2020

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Strategic Alpha

Dear StrategicAlpha Tribe Members,

BSE Smallcap Index has created an Upflag Pattern Suggesting a % Up move from Current Levels. If Patterns sustains, then many of the small caps which are subdued from sometime after 2018 Highs can roar back again. However, Stock Selection is the key as Small caps is such a space, where there is Entry, But no road to Exit due to Liquidity Issues. One should focus only on the Circle of Competence to find some gems in Micro and Smallcap Space. If you have not read my post on the circle of competence, Please read it here-https://bit.ly/2UvQEih.

Value Investing has not worked for a long time around the world, Many Market Pundits are calling it, end of the Value Investing Era, Some People also saying Value Investing is Dead. The popular belief is comfortable investing in So-Called Largecaps/Bluchips in the recent past has been highly rewarding. The popular belief is against the value investing style, however, I believe that’s where the big opportunity lies. Betting against the consensus can create outsized performance if the underlying thesis is strong and the market discovers the value. Read my post on Deep Value Investing here- https://bit.ly/2UvQEih

I believe we are in 2003 or 2013 times as far as Discounts in Selective Smallcaps are concerned, even after a lot of stocks have gone up in this Covid Rally. We are at a stage where there is selective Smallcaps where a handful of 10 baggers are Visible.

                 BSE SMALLCAP INDEX WEEKLY BREAKOUT

From the Stocks Point of View:-

Three stocks have come on my Weekly Breakout Radar,
1) Hindalco, 2) Somany Ceramics, 3) Sunflag Iron.

Hindalco and Sunflag Iron are Old Economy Stocks that I track. I believe old economy Stocks will be leaders of the upcoming bull market. If you have not gone through my blog on old economy stocks please read it here- https://bit.ly/38EBQpQ

Let’s move forward and see Trade Setups for:-

1) Hindalco:- Hindalco has broken out on weekly charts following the Commodity -Aluminum Price Action. Please read my post on Aluminum written few months back here- https://bit.ly/3nvSxbi

2) Sunflag Iron:-

3)Somany Ceramics:-

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Important Note-  The objective of this blog is to share knowledge about Multibagger Opportunities/ Techno-Funda Opportunities/ Insightful posts to help strategic alpha community members to navigate stock market success. Any post here should not be considered as Advise. For Stock Market Success, Please do your own Homework.

The author of the blog Mr.Suyog Dhavan is a Full-time Investor / Value Trader and Value investing/Trading Mentor. His style of Investing is inspired by Mohnish Pabrai, Peter Lynch, and Porinju Veliath. He is the founder of Strategic Alpha Wealth, A Premier stock market mentorship firm with a mission to touch the lives of 1Lakh people through its mentorship program.

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