Stay with winners! Nearly 100 stocks hit fresh 52-week high in April
by Admin |12/04/2018
The S&P BSE Sensex remained volatile so far in April, gaining just about 2 percent, but there were plenty of stocks which hogged the limelight.
The S&P BSE Sensex is still 7 percent away from its 52-week high of 36,443 — recorded back in the month of January — but there are nearly 100 stocks in the S&P BSE 500 index which rose to fresh 52-week high so far in the month of April.
Analysts advise investors to stay with stocks which are witnessing momentum rather than trying to catch a falling knife. Stocks which rose to their fresh 52-week high include names like Kotak Mahindra Bank, IndusInd Bank, Avenue Supermarts, Titan, Nestle, Bandhan Bank, HDFC Standard Life, Apollo Tyres, Jubilant FoodWorks, Godrej Agrovet, and ICICI Securities, among others.
“Stocks hitting fresh highs, generally indicates structural/fundamental tailwinds which have or might result in positive earnings momentum going ahead. Mr. Market typically tend to discount this pretty efficiently in the short term as can be reflected in the rise of prices of such stocks,” Prasanna Pathak, Fund Manager, Taurus Mutual Fund told Moneycontrol.
Many small and midcap stocks are witnessing upward momentum, thanks to optimism around March quarter results. The good news is that the micros have turned positive with clear signs of healthy growth in corporate earnings in Q3 results and the trend is likely to get carried forward in Q4.
“The market participants are eagerly awaiting Q4 and full year FY18 results to further reaffirm the improving trend in earnings growth in India. The consensus earnings estimates are factoring a 20 percent plus annual growth rate in Sensex earnings over FY18 to FY20,” Sharekhan said in a report.
Though the revision in earnings of some banks and another adjustment could lead to some downward revision in estimates going forward, the healthy growth in earnings would definitely support equity markets, it said.
More importantly, from an investors' perspective, the year ahead would be more of a stock pickers' market rather than an all-out rally as seen in 2017. Hence, focus on quality is very important even for stocks which are hitting fresh 52-week highs.
“One thing which we have to accept is that the stocks which are trading near their 52-week highs are backed by some logical rationale in a scenario when the overall mood of the market is muted,” Soumen Chatterjee, HoR, Guiness Securities told Moneycontrol."