Hi Friends,
Since End Jan 2018 Mid & Small Caps are in a Downtrend. And a lot of Stocks have Dropped 50-80% causing Draw Downs in Investor Portfolios. This Fall has ruined the Investor Sentiments and Faith in Equity Markets.
This Fall is more Painful to many as Despite the Mainstream Index recovered from the 10% Fall to come back to ATH Mid & Small Caps are still not showing any Signs of Recovery. Lot of Investors are shifting to Large Caps and Many want exit from the MidCap Portfolio.
But is this the Time to actually look for Buying the Mid & Small Caps? Is the Tide going to Turn? Will the Midcap Investor get back the Glory?
The answer to all above questions is : Nothing is Permanent in Market. This Time will Change. Let The Dust Settle.
The Current Fall has come after the steep Rally in last 4-5 years. And though it sounds very abnormal because of Divergence with Mainstream Index Nifty. The Fall is very much Normal Fall After almost 200-300% Rally from August 2013 Lows.
Lets have a look at Midcap 100 & Small Cap 100 Charts.
Both the MidCap 100 & SmallCap 100 Indices are Falling in a Contracting Range. Making the Falling Wedge Pattern which is Bullish Reversal Pattern. Also both the Indices nearing Uptrend Channel Support and Swing Low Support which is Unlikely to Break.
Wave Count:-
The Long Term Wave Count of both Mid & Small Cap 100 Suggest that the Indices are in Long Term Uptrend. And The Current Decline seems to be Minor Degree Wave 4. Post the completion a Robust Rally in Wave 5 is likely to Scale to New Highs in Next 15-20 Months.
As per Time Analysis and also Pattern this Wave 4 might Get over in a week or 2. The Correction will get Over once both the Indices Breakout of Falling Wedge. Post which a Robust Rally in Wave 5 is likely to Scale New Highs.
The Below Quote from the Legendary Trader Jesse Livermore suits the current situation:
“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
While your Entry is Equally Important to minimize the Risk it's also Important to give Time to Market. The Big Money is Made by Holding the Winners for at least 3-5 years.
In Investing one must remember that "Rome wasn't Built in one Day."
By no means I'm suggesting to hold Bad Stocks here. The Stock selection is most Important in Investing and it's also Important to constantly Reshuffle the Portfolio to Add Winners and Cut out Losers.
Conclusion:-
We are Expecting Bullish Trend Reversal From End July to Early August in Mid & Small Caps and One may seek to add Stocks after Own Research. The Stock selection is most important while adding Mid & Small Caps.
Declaimer:-
We are holding Mid & Small Caps Portfolio with Draw Downs limited by Continuous Reshuffling. And we would continue to Hold and add Mid & Small Caps to Portfolio for Multi-fold Gains in Next 15-20 months.
Thanks & Regards,
Harsh Dixit.
Since End Jan 2018 Mid & Small Caps are in a Downtrend. And a lot of Stocks have Dropped 50-80% causing Draw Downs in Investor Portfolios. This Fall has ruined the Investor Sentiments and Faith in Equity Markets.
This Fall is more Painful to many as Despite the Mainstream Index recovered from the 10% Fall to come back to ATH Mid & Small Caps are still not showing any Signs of Recovery. Lot of Investors are shifting to Large Caps and Many want exit from the MidCap Portfolio.
But is this the Time to actually look for Buying the Mid & Small Caps? Is the Tide going to Turn? Will the Midcap Investor get back the Glory?
The answer to all above questions is : Nothing is Permanent in Market. This Time will Change. Let The Dust Settle.
The Current Fall has come after the steep Rally in last 4-5 years. And though it sounds very abnormal because of Divergence with Mainstream Index Nifty. The Fall is very much Normal Fall After almost 200-300% Rally from August 2013 Lows.
Lets have a look at Midcap 100 & Small Cap 100 Charts.
Both the MidCap 100 & SmallCap 100 Indices are Falling in a Contracting Range. Making the Falling Wedge Pattern which is Bullish Reversal Pattern. Also both the Indices nearing Uptrend Channel Support and Swing Low Support which is Unlikely to Break.
The Long Term Wave Count of both Mid & Small Cap 100 Suggest that the Indices are in Long Term Uptrend. And The Current Decline seems to be Minor Degree Wave 4. Post the completion a Robust Rally in Wave 5 is likely to Scale to New Highs in Next 15-20 Months.
The Below Quote from the Legendary Trader Jesse Livermore suits the current situation:
“It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!”
While your Entry is Equally Important to minimize the Risk it's also Important to give Time to Market. The Big Money is Made by Holding the Winners for at least 3-5 years.
In Investing one must remember that "Rome wasn't Built in one Day."
By no means I'm suggesting to hold Bad Stocks here. The Stock selection is most Important in Investing and it's also Important to constantly Reshuffle the Portfolio to Add Winners and Cut out Losers.
Conclusion:-
We are Expecting Bullish Trend Reversal From End July to Early August in Mid & Small Caps and One may seek to add Stocks after Own Research. The Stock selection is most important while adding Mid & Small Caps.
Declaimer:-
We are holding Mid & Small Caps Portfolio with Draw Downs limited by Continuous Reshuffling. And we would continue to Hold and add Mid & Small Caps to Portfolio for Multi-fold Gains in Next 15-20 months.
Thanks & Regards,
Harsh Dixit.
