Why Nifty is Going Up but Mid Caps Stocks are Crashing

By | February 6, 2019 3:33 pm

Got Few Calls after carnage in Mid and Small Caps Stock in last few days. Shall we Short Nifty as My Stocks are crashing.

Nifty today is trading new 4 month High suggesting underlying trend is strong and Small/Mid Caps Stocks are near Yearly Low.This Kind of divergence was seen in 2012-13 and than we had a big Bull market

The Reason for Nifty Out performance is we need to understand the Nifty constituents

Nifty Weight age has the answer,Top 10 Stocks has 51% Weight age in Index. So When these Stock starts correcting than only we will see a Significant Correction in Index

Reliance is near Life High

HDFC almost near Life High

HDFC Bank almost near Life High

MiD Cap coming near Support

Small Cap multiple Support

So as a Trader our focus should be on the Instrument you are trading and Many Mid and Small Cap Stocks are at very attractive valuation which can give good entry to Long Term Investors.  So Hopefully after reading this Post Many Traders will not Blindly short Nifty looking at the correction in Stocks.

Leave a Reply