India’s record-breaking rally in small-cap stocks is nearing an important hurdle that could set off an even further bullish move in the coming year, should it give way.

The Nifty Smallcap 100 Index has rallied 47% so far this year and is headed for a formidable upside barrier, represented by the upper-end of a long-term rising channel which has its origin at the 2009 low. The boundary currently rests around 4% above the November close.

The chances of getting there before year-end are high. Seasonality patterns covering the last decade show that the average return in December for the index has been around 3%, with monthly losses notched in only two of 10 instances.