MF reclassification ahead: Hero Moto, SBI Card in focus; key levels here

As per reports seven stocks are likely to witness a switch from largecap to midcap classification and vice versa; here's what the chart suggests for select five stocks.

The Association of Mutual Funds in India (Amfi) is scheduled to review stock classification - such as midcap, smallcap and largecap, based on the market-capitalisation of individual companies. Amfi carries out this exercise twice a year - first at the start of January and then in the seventh month - July.

The top 100 companies based on the average market-capitalisation (m-cap) in the past six months qualify as largecaps, the next 150 become midcaps and the rest smallcaps.

As per a IIFL Securities report, Hero MotoCorp, Zydus Lifesciences, JSW Energy, NHPC, Bharat Heavy Electricals, Bosch and Samvardhana Motherson are expected to earn upgrades in the revised list as largecaps. 

The seven existing largecap stocks that are likely to be replaced are -  ICICI Prudential Life Insurance, ICICI Lombard General Insurance, Polycab India, SRF, Marico, SBI Cards and Berger Paints India. READ MORE

Going ahead, these 14 stocks are likely to be on investor’s radar as the re-classification would eventually lead to a significant churn in mutual funds portfolio holdings.

Hero MotoCorp

Current Price: Rs 5,820

Downside Risk: 5.5%

Support: Rs 5,730

Resistance: Rs 5,850

Hero MotoCorp stock has witnessed a massive 133 per cent rally post April 2023 after the stock broke out above the short-term monthly moving averages. The long-term chart suggests that the bias is likely to remain upbeat as long as the stock holds above Rs 5,550 levels. CLICK HERE FOR THE CHART

However, the stock is trading in an overbought zone on multiple time-frames, and hence can be susceptible to profit-taking. For now, the Rs 5,850 level is acting as an intermediate resistance. Break and sustained trade above the same can trigger a fresh rally.

On the other hand, near support for the stock is seen at Rs 5,730 levels. Break and sustained trade below the same can tipped a dip towards Rs 5,500 levels.

ICICI Prudential Life Insurance Company

Current Price: Rs 606

Potential Upside: 6.5%

Support: Rs 586

ICICI Prudential Life stock is attempting to give a breakout on the daily scale. The stock at present is trading above the higher-end of the Bollinger Bands on the daily chart, which stands at Rs 607. A close above Rs 607, can trigger a swift up move towards Rs 645 levels. CLICK HERE FOR THE CHART

On the downside, the stock may fall-back to its 50-DMA (Daily Moving Average) at Rs 586.

ICICI Lombard General Insurance Company

Current Price: Rs 1,754

Potential Upside: 5.5%

Support: Rs 1,727; Rs 1,685

ICICI Lombard stock is likely to trade with a positive bias in the near-term as long as it sustains above Rs 1,727. On the upside, the stock needs to break and sustain above Rs 1,760 for further gains. The stock can potentially rally to Rs 1,850 levels. CLICK HERE FOR THE CHART

On the flip side, failure to sustain above Rs 1,727, can trigger a dip to Rs 1,685 levels.

Marico

Current Price: Rs 619

Potential Upside: 13%

Support: Rs 609; Rs 585

Marico stock is seen testing support around its 20-DMA at Rs 609 levels. In case of sustained weakness, the stock can fall to Rs 585 levels. The overall bias is likely to remain positive as long as the stock sustains above Rs 540 levels. In the long-term the stock may attempt a rally towards Rs 700-mark. CLICK HERE FOR THE CHART

SBI Card

Current Price: Rs 723

Potential Upside: 15.5%

Support: Rs 707

Resistance: Rs 762; Rs 795

SBI Card stock is on the verge of turning favourable on the weekly scale. Today, the stock is seen trading above its 20-WMA (Weekly Moving Average), which stands at Rs 716. Further, key momentum oscillators have shown a positive crossover. Hence, the stock may see gains in the near-term. CLICK HERE FOR THE CHART

On the upside, the stock is likely to test Rs 795 levels, with interim resistance likely around Rs 762. The monthly chart indicates an upside target of Rs 835. Support for the stock is seen at Rs 707 levels.