Momentum: Bulls Keeping an Eye on This Outperformer!

Despite a green opening of the broader markets, the Nifty 50 index has lost all of its opening gains and is currently trading flat at 16,952, by 12:23 PM IST. But the small-cap space is doing relatively better, all thanks to a relentless sell off in the recent past. The Nifty Smallcap 50 index is up 0.51% to 4,014 and Route Mobile Limited (NS: ROUT ) is one stock from this space that is catching attention on the street.

It is an IT company catering to the mobile communications industry, having a market capitalization of INR 8,494 crores. The stock has been showing a higher resilience as compared to peers and has been able to dodge the ongoing selling spree. For the last few sessions, it was trading sideways while many small-caps were taking to their 52-week lows. This relative outperformance is also being witnessed in today’s session as when the benchmark index is paring some of the losses, the share price of Route Mobile surged to the highest level of 2023, at INR 1,385.15.

Image Description: Daily chart of Route Mobile with volume bars at the bottom

Image Source: Investing.com

Currency, the stock has retraced from the day’s high to INR 1,372, but still trading comfortably above the resistance made during the recent consolidation phase. This is a clear signal of demand outstripping supply and indicating a potential for the stock to scale to higher highs in the near future. As the market volatility is quite high, position sizing should be on the conservative side for traders looking to capitalize on this upside.

The next important hurdle is present at around INR 1,450, meaning the stock could easily rally to this level. But one thing that is concerning for bulls is the low volume on today’s move. As of the writing, a total of 212K shares have exchanged hands on the NSE which is meagerly above the 10-day average volume of 205K shares. This could be due to a fearful environment in the market which is scaring investors to take exposure to volatile stocks. This is another reason, that traders should not go all guns blazing on the long side.

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