S&P Midcap outperforms, but remains sluggish at all-time high

Where the benchmark indices have been sluggish with the end of Gujarat election boom, the broader markets have continued their rallies initiated after December 14. Both Midcap and Smallcap indices have duly outperformed the benchmark indices since December 14. Where both Nifty and Sensex gained around 2 per cent, BSE Midcap index surged nearly 4.8 per cent till date.

After taking a major support almost twice at 16600-16620, the index bounced back breaching its major resistance at 17135 levels. The bounce back started when the 14-period RSI hit a triple bottom at 50 levels after falling from the overbought zone of 78 on November 6. Further the index price witnessed momentum on RSI breakout on December 18 at 67 levels.

The index has been following higher tops higher bottoms pattern since December 2016. Considering near term, the index seemed lethargic on Friday with equal selling pressure with 46 advances and 48 declines. Thereby, in case it creates a Doji in Friday’s session, the index may correct in the coming sessions where we hold 17400-17250 as the supports followed by 17130-17000. On the upside, the index is already trailing at all-time high levels. Still, going forward, we hold 17660-17930 as immediate resistances followed by 18000