Resilient stocks that can weather storm of second wave of Coronavirus

There is no denying the fact that India is already beginning to reel from a second wave of Coronavirus.  

India recently posted its highest number of COVID-19 cases since October 2020 while the Centre on Tuesday warned that the situation is going from “bad to worse”.   

During the first wave of Coronavirus, we saw a scintillating performance by the diagnostics stocks. The stock of Thyrocare Technologies soared 195 per cent from March 2020 lows to October 2020 high while the stock of Metropolis Healthcare jumped 132 per cent between March 2020 lows and November 2020 highs. Besides, the stock of Dr Lal PathLabs zoomed 103 per cent from March 2020 lows to October 2020 highs.   

If we go by the fact that financial market cycles are primarily investor behaviour cycles and human nature doesn’t change much or causes the recurrence of past patterns, then we could see another round of rally emerging in the diagnostics stocks.     

The month-to-date performance of diagnostics stocks is as follows: Dr Lal PathLabs surged 16.50 per cent, Metropolis Healthcare gained 15.70 per cent and Thyrocare Technologies inched higher by 1.34 per cent. On the other hand, if we compare the performance of these stocks against Nifty 500, which is up by a mere 1.3 per cent, it clearly reflects that diagnostic stocks have a perfect immunity to tackle this high volatility of the markets.