Indian markets pulled back swiftly this week even though it was a short trading week. The Nifty-50 is higher by 2.5% this week while the Nifty Mid Cap 100 Index and the BSE Small Cap Index both are up by 3.8% each.
The mid and small caps outperformed the benchmarks in FY21 as the Nifty Midcap 100 rallied around 106% while the BSE small cap index surged around 117% in FY21.
Talking about the golden crossover pattern formed in the Nifty Midcap 100 index, Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities said, ”There is a golden crossover in the Nifty Mid Cap 100 Index wherein the 50 weighted moving average (WMA) has gone above the 200 WMA which signals long term bullish trend.’’
”After the fiscal year end investors are back into the market with more action seen in the mid and small cap space’’, Oza added.
The Nifty 50 has once again bounced above the 50 day moving average (DMA) which is a good sign, he said. Going forward the RBI policy and earnings season could be the next trigger for the market. He added on by saying that the start of FY22 has been very good and April month could likely see more action with the start of the earnings season.
The golden cross occurs when a short-term moving average (50 WMA in this case) crosses over a major long-term moving average (200 WMA) to the upside. It is interpreted as a long-term bull market going forward. The bullish outlook on mid-cap stocks can open up many opportunities and gains for the mid-cap space in the coming months.
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