Midcap ETF forming Dual Rounding PatternThe ICICI Prudential Midcap ETF is currently exhibiting a technically significant dual rounding pattern on its chart, with one smaller rounding top pattern nested within a larger, longer-term rounding formation. The 21 level has emerged as a strong support zone. A breach of this level would likely activate the smaller rounding top pattern, potentially leading to a further decline toward the 19 level.
The ETF initially displayed a bullish structure characterized by higher highs and higher lows, but has now shifted to forming lower highs and lower lows, a common early indicator of a trend reversal from bullish to bearish. This suggests that while the market is in the early stages of this reversal, it's too soon to definitively call the transition.
Volume analysis plays a crucial role in confirming price action, as volume tends to be a more reliable indicator. In the recent chart movement, a clear volume divergence was observed during the last upward move, indicating weakening buying interest. Conversely, there has been volume agreement during the recent price decline, further supporting the possibility of a bearish shift. Close monitoring of volume trends will be essential in confirming this potential reversal and avoiding any price manipulation signals.
****Nifty Midcap forming same pattern but we analyze this because we will do Price Volume Analysis***
Intermarketanalysis
Nifty Small Cap Index signaling Risk On/ Outperformance BiasAttached: Nifty Small Cap 100/ Nifty 50 Daily Live Market Chart
A Possible Trend Change in this Ratio as there is Breakout
And now Small Caps are set to Outperform Large Caps for the coming few weeks
This is Risk On behavior, something has clearly changed on this Chart
GLENMARK- Relative Strength says Buy!Attached: Glenmark/ Nifty 50 Weekly Chart as of 31st March 2023
This Relative Strength (Ratio) Chart clearly shows the Outperformance of Glenmark over Nifty 50 has Started!
The Ratio Chart has given an Inverted Head & Shoulders Breakout with this Week's Candle Close
If you compared Glenmark and Nifty 50 both on a Year To Date basis for 2023, then we get:
Glenmark= Up 9.56% YTD
Nifty 50= Down Down 4.12% YTD
What this Means is that:
Going forward expect Glenmark to keep Outperforming Nifty 50
Your Money is better off Invested in an Outperforming Stock instead of Index Nifty 50
Glenmark Pharma can be one of the Leading Stocks for 2023
This has clear BULLISH Implications for the Stock Price
.................
Refer to my Related Ideas to see the Analysis of Glenmark's Price Chart which also has Bullish Implications like this Ratio Chart
New Low in Bank Nifty not confirmedClassic dow theory states that a new low in one index not confirmed by others indicates a potential trend reversal on cards. Nonconfirmation amounts to inter-market divergences that are bullish or bearish. In this situation, the new low in bank nifty today over the last few days is not confirmed by the Nifty. Even more, the outperformance of the Midcap 100 index below compared to the large cap indices shows that the broad market is not participating in the recent fall. All signs of bullish divergences. Ahead of the Union budget, the market is shaking out weak hands. The near triple bottom in Nifty is an interesting setup for the weeks ahead.
NIFTY MIDCAP DIVERGENCENSE:NIFTY NSE:CNXMIDCAP NSE:CNXSMALLCAP Diverging for couple of days. Ideally the broad market shall start picking up.
While Nifty is getting selling pressure near the Highs today. Midcap and Smallcap Index getting buying near support zone.
Midcap and Smallcap shall start picking up from here on.
The Broader Market Indices must converge with the Mainstream Index Nifty 50.
Inter-market Divergence is not sign of healthy trend. Longer the time the divergence prevails it leads to trend reversal.
As Nifty and Bank Nifty are near the Highs along with other Indices. Broader Market Indices and stocks shall pick up the trend now.