Can we see another rally of Nifty midcap index in the coming days?

The NIFTY Midcap 100 Index comprises 100 tradable stocks listed on the National Stock Exchange.

The NIFTY Midcap 100 Index captures the movement of the midcap segment of the market. The NIFTY Midcap 100 Index comprises 100 tradable stocks listed on the National Stock Exchange (NSE) and rescheduling of index constituents happens bi-annually every year. The index heavyweight is Tata Power comprising 3% of the index value. In March 2020, Nifty Midcap 100 made a low of 10750 and ever since, the index has been scaling newer highs and its record high stands at 33243. That’s a stupendous rally of about 209.23% in a matter of 21 months.

The index performance is unmatchable as it delivered returns of 46.89% YTD overperforming Nifty whose performance lies at 24.30% YTD. The three-month performance lies at 13.85% while Nifty delivered a mere 5.35%. Interestingly, the index on Tuesday is up by 1.07%. Thus, we see that the Midcap index has outperformed the Nifty in every aspect.

The index is respecting its long term trendline that started from December 2020 and has taken support multiple times. Currently, the index lies at 30619 and is down by about 8% from its all-time high. It lies near to its trendline and 100-DMA which is at 29400. The last trading session closed below its 20-DMA and 50-DMA. The RSI is at 41 which indicates weakness. Despite the persistent selling pressure in the overall market, the index hasn’t breached its short-term low of 29800. The index is forming a double bottom pattern at around 30000 as it looks to bottom out and gain momentum.

As it trades near its support, any strong bullish candle can mean that the reversal is on cards from hereon. Currently, the next hurdle for the index is to close above its 20 and 50-DMA along with the short-term resistance of 32000. Once done, we can witness some good momentum in the market participant favourite index.