Smallcap index down over 3% in February so far; time for bottom fishing?

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Key Points

After three consecutive months of gains, the BSE Smallcap index is witnessing a strong sell-off in February..

The BSE Smallcap index is down over 3 per cent in February so far while the benchmark Sensex is down about 0.3 per cent..

Some 16 components of the BSE Smallcap index have fallen over 20 per cent while as many as 195 components have declined over 10 per cent in the smallcap index. . . . View Full Image..

Some experts point out that the trends of the last few years show that the smallcap index sees a rebound in March after a sell-off in February..

If we back history to repeat, then Februarys dips would be good to go on an accumulation drive as March ended in green in all the years in the last five years, except for 2020," said James. . Rupak De, Senior Technical Analyst at LKP Securities observed that on the weekly timeframe, a spinning top pattern has emerged, indicating a potential bearish reversal in the short term..

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