The most attractive feature of mid-caps to investors is that they are expected to grow and increase profits, market share and productivity, which puts them in the middle of their growth curve. However, since the last two years, all midcap stocks have managed to do is to disappoint the investors’ big time. As we all know “A business needs the order to survive and disorder to evolve” thus it may be the right time to say that midcaps might have learnt their lesson and are ready to evolve.
NiftyMidcap index has taken support at its 61.8% retracement of the entire up leg from 11190 to 21826 on a weekly scale. The index after consolidating in a range from 14950 to 16850 levels for three months is finally giving some hopes to the bulls and is indicating that this may be the right time to enter the midcap world for short to medium-term gains.
The index has formed golden crossover on the daily chart where the 50-day exponential moving average is moving above its 100-day exponential moving average. Thus, indicating that the index is may be ready to cross the starting point of its falling supply trend line and run to reach the finishing points which is placed 18250 on an immediate basis and if the stamina stays then the race may continue till 18500 levels.
The midcap stocks, however, is not yet completely out of the woods as it continues to make lower top lower bottom formation on the weekly and monthly chart thus indicating that not all the midcap counters may be participating in the rally. The support for the index is placed around 14950 then 13800 zones while on the upside if the index manages to sustain above 17350 then the up move may continue towards 18250 then 18500 zones.
PS: Don’t put all your eggs in one basket, so it is important to diversify your portfolio and invest according to your goals and risk tolerance.
Author: Miss.Ayushi Sushil Bagri Equity Research (Investment Services), 30th November 2019