(Bloomberg) — India’s record-breaking rally in small-cap stocks is nearing an important hurdle that could set off an even further bullish move in the coming year, should it give way.
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The Nifty Smallcap 100 Index has rallied 47% so far this year and is headed for a formidable upside barrier, represented by the upper-end of a long-term rising channel which has its origin at the 2009 low. The boundary currently rests around 4% above the November close.
The chances of getting there before year-end are high. Seasonality patterns covering the last decade show that the average return in December for the index has been around 3%, with monthly losses notched in only two of 10 instances.
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