By Brijesh Bhatia
In investing, market cycles are inevitable. Whether in a bullish or bearish phase, investor sentiment and stock performance often shift with the tides of economic and market changes. During a bullish market, investors are drawn to stocks with strong upward trends, enjoying the thrill of the ride. But as the market turns, the mood shifts dramatically. Fear and caution take centre stage, prompting many to lock in profits and exit their positions.
But when the market resumes bullish sentiments, some stocks may continue to rise during a market reversal; others fall victim to changing tides. This article explores three midcap stocks that investors may want to avoid as the market resumes bullish sentiments.
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1. Carborundum Universal
Carborundum Universal, a key player in the industrial materials sector, has garnered attention for its diverse portfolio, which includes abrasives and ceramics. These products serve different industries, including automotive, aerospace, and construction.
Source: TradePoint, Definedge Securities
In technical analysis, a bullish trend is often marked by a consistent higher high–higher–low structure, a concept laid out in the Dow Theory. Carborundum Universal, however, is showing signs of a bearish reversal. The weekly chart reveals that the stock price has broken through a crucial upward trendline connected to the lows of 2020. This breach suggests a shift in momentum from bullish to bearish.
Carborundum Universal’s recent technical performance raises red flags despite potential market-wide recovery signals. Investors looking for growth in a reversal market may find the stock underperforming, as the change in trend is difficult to ignore. Therefore, it is wise to tread carefully with this one during the market’s transitional phase.
2. EaseMyTrip
EaseMyTrip, one of India’s leading online travel agencies, has been riding the wave of India’s expanding tourism market. The government’s focus on the tourism sector and EaseMyTrip’s easy-to-use platform have given the company a competitive edge,
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