The stock markets have been on a rollercoaster ride lately, and small-cap stocks are feeling the heat. The Indian stock market has seen significant selling pressure, with several stocks from the Nifty SmallCap 100 and Nifty SmallCap 250 indices underperforming. While some stocks have managed to hold their ground, many have witnessed sharp declines, with experts predicting further downside.
So, which small-cap stocks are most at risk? Let’s break down five stocks that could see further drops of up to 21% based on current market trends.
Aegis Logistics: Facing a Potential Downside
- Current Price: ₹666
- Downside Risk: 11%
- Support Levels: ₹644, ₹630
- Resistance Levels: ₹684, ₹725
Aegis Logistics is hovering on the edge of a major breakdown. The stock is struggling to stay above ₹684, and if it slips below this level, we could see a deeper correction. Support exists at ₹644, but a break below this could send the stock tumbling towards ₹593. On the flip side, if there’s a rebound, the 20-Day Moving Average (DMA) at ₹725 will be the major hurdle.
Karur Vysya Bank: Under Selling Pressure
- Current Price: ₹221
- Downside Risk: 15%
- Support Levels: ₹210, ₹202, ₹195
- Resistance Level: ₹230
Karur Vysya Bank is currently testing the 100-DMA at ₹222.70, and things don’t look great. Key indicators suggest a downward breakout, meaning the stock could slide to ₹188 if selling pressure intensifies. There’s some support around ₹210 and ₹195, but unless it rebounds strongly, a further drop is likely. Resistance stands at ₹230, making it the level to watch for any potential recovery.
Mastek: Biggest Risk Among the Five?
- Current Price: ₹2,273
- Downside Risk: 20.8%
- Support Levels: ₹2,288, ₹2,211, ₹1,960
- Resistance Levels: ₹2,325, ₹2,455
Mastek has already taken a hit, dropping over 7% in a single session. It’s now trading below the lower Bollinger Band, which is a classic bearish sign. If the stock falls below ₹2,288, we could see further declines to ₹1,800, with some interim support at ₹1,960. Unless it manages to reclaim ₹2,455, the trend will likely remain bearish.
Deepak Fertilisers: Breaking Below Key Levels
- Current Price: ₹964
- Downside Risk: 11.8%
- Support Level: ₹920
- Resistance Levels: ₹989, ₹1,000, ₹1,070
Deepak Fertilisers has dropped below its 200-DMA for the first time since June 2024. This signals weakness, and the stock could be heading toward ₹920 or even ₹850 in a worst-case scenario. For any chance of recovery, it needs to break back above ₹1,000. Until then, the risk remains on the downside.
JK Lakshmi Cement: Bears in Control?
- Current Price: ₹728
- Downside Risk: 17.3%
- Support Levels: ₹712, ₹680, ₹657
- Resistance Levels: ₹741, ₹775
JK Lakshmi Cement is stuck in a bearish phase, unable to stay above ₹741. If the stock falls below ₹657, a further slide to ₹602 could be on the cards. For now, the stock markets are not in its favor, and unless it reclaims ₹775, the trend will likely remain weak.
Why Are Small-Cap Stocks Struggling?
It’s no secret that small-cap stocks are facing significant selling pressure. Over the past few months, the Nifty SmallCap 250 index has underperformed, with several stocks declining more than 40-50%. The broader market is witnessing a shift as investors move towards safer assets to protect their capital.
Experts suggest that the small-cap index could still decline another 5-8%, meaning more downside is possible. While some stocks like Redington, Amber Enterprises, and Zensar Technologies have performed well, many others continue to struggle.
Should You Exit or Hold Your Small-Cap Stocks?
If you’re holding any of these stocks, it’s important to assess your risk tolerance. If the stock markets continue to face pressure, further declines are likely. It might be a good time to re-evaluate your portfolio and consider shifting to safer options if you’re uncomfortable with high volatility.
However, for long-term investors, panic selling may not be the best strategy. Instead, keeping an eye on support levels and overall market sentiment can help in making informed decisions.
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Final Thoughts
The Indian stock market has been volatile, and small-cap stocks are among the worst hit. While some stocks could see a recovery, others might continue their downward trend. Aegis Logistics, Karur Vysya Bank, Mastek, Deepak Fertilisers, and JK Lakshmi Cement are all facing bearish pressure, with further downside risks.
Investors should remain cautious and watch for key technical levels before making any decisions. If uncertainty continues, it may be wise to rebalance portfolios to minimize risk. Keep an eye on market trends and be prepared for more volatility in the coming weeks!
