NO, I do not mean that Mid-caps will crash BUT relative to
the Nifty index looks like the Midcap index might underperform. Below is the
chart of the Midcap index divided by the Nifty index – quick recap – a rising
ratio means the numerator is outperforming the denominator, reverse for a
falling ratio.
The ratio is now below its 40-week moving average. The ratio
had a stellar run since 2014 and twice fell below the 40-week MA, this is the
third time. Also, the moving average seems to be flattening/rolling over –
caution longs. Risk to this
view – a upside breakout in the ratio and sustains above the 40-week MA will
put long term relative strength back with midcaps.
There is no perfect answer for when to buy/sell
BUT in every time period there will always be something that out/under-performs.
Keep up good work Karan I see bright future for you in Market which today is surviving on WB quote recycling.
ReplyDeleteHowever, disagree when you say even relatively Midcaps will under perform Nifty. Rather much bigger out performance and euphoric phase of small/midcaps may start from next week (7th Aug). This short breakdown is false signal :-)
thanks for the kind words. yes anything is possible. as of this moment Midcap index dominating the Nifty intraday haha :) anything is possible, just seeing what the signal is doing rest not in my hands :-)
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