Midcaps to outdo benchmarks in setting historic peak; 50% flash leadership

if the Nifty Midcap index succeeds to absorb selling pressure emerging at current level of 33,000 mark, the probability of breaking out over the previous historic peak of 33,245 becomes more plausible

The Nifty Midcap index is flaunting signs of robust bullishness and an irresistible sentiment that could set a new historic peak, ahead of domestic benchmark indices (The BSE Sensex and Nifty 50).

In the last three sessions, not only the BSE Sensex and Nifty 50, but Nifty Bank index; which was considered to be the front runner, displayed signs of fatigue.  All these three indices have tumbled close to a percentage point, while Nifty Midcap index is trading firmly, tracking it course to reach a new all-time high. The index is up 0.75 per cent during the same period.

The Midcap index is witnessing bullish momentum in the overbought category of all the major technical indicators such as Relative Strength Index (RSI), and Moving Average Convergence Divergence (MACD).

In doing so, the index has revealed unprecedented optimism in nearly 54 stocks out of its 100 constituents. While close to six stocks have reached fresh all-time highs, others are expressing aggressive chart structures that aimed at hitting higher levels in the coming sessions.

There are few who are demonstrating reversals, equipped with follow-up accumulation, and are poised to breakout on the upward direction. 

Shares of CG Power and Industrial Solutions, Apollo Tyres, TVS Motor Company, Indian Hotels Co. and Poonawalla Fincorp have been reaching successive peaks in recent sessions, expecting vertical upside if broader market supports the positive bias. 

Similarly, Astral, AU Small Finance Bank, Balkrishna Industries, Cummins India,  Max Healthcare Institute, Oil India, Syngene International, and Torrent Power are traing right near to their all-time high.

Technically, if the Nifty Midcap index succeeds to absorb all the sell-off emerging at current level of 33,000 mark, the probability of it breaking out over the previous historic peak of 33,245 becomes more plausible.

A breakout setting a new historic peak could mean a rally of another 5 per cent cannot be ruled out. The index might reach 35,000 levels. As a result, most of its constituents are likely to rally upward. 

Source: spidersoftwareindia