The Indian stock market fell sharply on Friday, the 13th of March. It was not just the day. It was the fear of the war not panning out as many had expected. The questions top of mind for investors now are – “Is the rally over?” “Is this the beginning of a bigger correction?”.
But experienced investors know a simple fact about markets. Each market crash quietly sows the seeds of the next bull run. As we say in the Indian culture (translated), “The End is a New Beginning.”
History has shown time and time again that the best chances come up when the news is full of pessimism. When the crowd is selling in a panic, the patient investor quietly looks for stocks where price, structure, and volume are signalling accumulation.
A few stocks from the Nifty Microcap 250 universe are actually acting in this way, which is interesting. Even though the market is volatile, their charts show strong technical structures backed by rising volumes, which is often an early sign that smart money is building positions.
Here are three small-cap stocks that may probably trend bullish in the market crash.
1. Avanti Feeds: Quiet Strength with an 8 years Breakout
The monthly chart for Avanti Feeds shows a strong technical change.
Avanti Seeds Monthly Chart
The stock has broken out of an 8 years consolidation range at Rs 980. These kinds of breakouts that last for years are often the start of a new structural uptrend.
The behaviour of volume is more interesting. The higher volume in the recent breakout, compared to the last few months means that institutional accumulation is happening, not speculative buying.
This combination of a breakout with volume means the trend is stronger.
If the breakout holds, the stock could enter a “new price discovery phase,” which is usually the best time for investors to make money.
2. South Indian Bank: A Quiet Turnaround
For almost ten years, South Indian Bank was stuck in a long-term downtrend. After years of poor price performance, a lot of investors had given up on it.
But the monthly chart is now showing a convincing picture.
South Indian Bank Monthly Chart
The stock has recently broken above the Rs 32–Rs 37 resistance zone, which has acted as a ceiling in the past. When a stock breaks through a resistance level that has been there for years, it usually means that the market’s view of the stock has changed a lot.
The volume behaviour during the breakout is just as important. The volume spikes on the chart show that an investors and traders joined in during the rally. Such an increase in volume during resistance breakouts often means that investors are interested again and institutions are active.
Stocks that come from long bases often have long-term trends because they go from neglect to discovery.
Some structural reversals can give investors who are willing to look past the noise in the market multi-year opportunities.
3. Sterlite Technologies Ltd (STLTECH): The Breakout from a Symmetrical Triangle
Sterlite Technologies has been trading inside a large contracting symmetrical triangle pattern for the past few years. This means that prices have been slowly getting closer together between falling resistance and rising support.
This kind of pattern usually means that there has been a “long accumulation phase.”
STLTECH Monthly Chart
Recently, the stock has gone up a lot and is now close to the upper trendline resistance of this structure, which has been around for a long time.
There are two things that stand out:
1. Sharp bullish candles in the last few months
2. Jump in volumes during the rally
When prices go up, volume spikes often mean that traders in the market are getting ready for a possible breakout.
The recent breakout means a beginning of a probable strong momentum because long consolidations usually lead to explosive breakouts.
From a trader’s point of view, setups like these often draw in momentum investors, which can speed up price movement.
Buying the Market Crash
When the markets dip a lot, emotions take over and greed turns to fear.
Fear makes a lot of investors leave positions at the worst possible time. But the market rewards those who are patient and pay attention to price structure instead of headlines.
The current fall in Indian stocks may be hard to deal with, but it is also giving some microcap stocks a chance to shine.
The charts for Avanti Feeds, South Indian Bank, and STL Tech show that smart money may be quietly positioning itself.
Investors who believe in India’s long-term growth story may not need to worry about these kinds of corrections.
They might just be invitations to gather the next market leaders.
Disclaimers:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia is an Independent Research Analyst and is engaged in offering research and recommendation services with SEBI RA Number – INH000022075. He has two decades of experience in India’s financial markets as a trader and technical analyst.
Disclosure: The writer and his dependents do not hold the stocks discussed here.
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