Don't miss out on these 2 small-cap stocks with the potential to deliver over 20% returns in May

We know the fact that only a handful of traders manage to make consistent profits, and what separates a consistent trader from an inconsistent one is the strategy and discipline to follow the trading strategy.   

In this fast-paced society where several trading tools can be accessed with a one-click, ideas on how to succeed are in abundance. However, the over-availability of tools and studies can become a double-edged sword, as it sometimes leads to analysis paralysis.     

In this article, we will share a list of stocks based on a very simple yet effective strategy, one that would help you to strengthen the probability of success in trading.  

The technique is seasonality analysis and helps to tell which stocks have performed well during a particular month. And as the saying goes ‘history tends to repeat itself; it is expected that the stock is likely to perform well as it has done in the past during that particular period.     

The month of April turned out to be electrifying for the bulls as investors took a sigh of relief after a surprising move by the RBI. 

The RBI hit the pause button on rate hikes and the other positive catalysts were: the US Dollar index which declined by 0.76% in April, which promoted inflow from the FIIs in the Indian equity market as a result, the BSE Sensex rallied about 3.6%, while the broader markets outperformed the frontline index as the BSE Midcap and Smallcap index jumped by nearly 6% and 7.3%, respectively. 

We expect the momentum to continue in the broader markets in May as well, that said, the activity is going to be stock specific. Considering this we have chalked down a list of the top two stocks from the BSE Smallcap segment, that should be on your watchlist as these stocks tend to witness good moves during May and historically, they have provided over 20% return having an accuracy of 70% in May.      

Here are the top 2 stocks to watch out for in May based on seasonality trends:  

Vinyl Chemicals (India) Ltd: Historically, the stock has been an outstanding performer in April. Out of 21 occasions, it has managed to deliver positive returns on 15 instances. Moreover, the average gains registered by this stock in May is about 23%, while the cherry on top is that the stocks' maximum return for May in the past years has been an eye-popping 70.70%.

ADF Foods Ltd: If we go by the historical performance of the stock in May, the stock has delivered an average of nearly 20.5% gains and it has managed to deliver positive returns on 15 instances out of 21 occasions in May.