In the age of memes and viral trends, it is fascinating to see how market sentiment often mirrors what is being discussed in popular culture. While social media and messaging apps are rife with bearish memes about the markets, there might be an underlying twist in the tale.
Are we on the cusp of a market reversal when no one expects it to rise? Could the bearish outlook be the very signal of an impending bullish turn?
The Nifty50, often the centre of market focus, is showing some strength as it holds its ground near 22,800. However, the Nifty Midcap 100 index is intriguing, signalling some exciting trading opportunities.
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After facing substantial corrections over the past few months, the market sentiment has been relatively cautious, with many midcap stocks losing 20-40% of their value. Yet, there is a conspicuous sign of a reversal on the charts, and traders might witness a momentum shift.
Nifty Midcap100 Daily Chart
Source: TradePoint, Definedge Securities
The Bullish Black Swan harmonic pattern is visible on the daily chart of Nifty Midcap 100, indicating the index’s reversal sign. Harmonic patterns are reversal patterns calculated using multiple Fibonacci ratios.
In addition, the Relative Strength Index (RSI), a key momentum indicator, shows a positive divergence.
If the index holds its recent low of 48,500, it could resume its bullish trend and potentially reach its all-time high of 60,900, making this an exciting phase for midcap traders.
As we zoom in on the individual stocks within this index, two stand out: Jubilant Foods Ltd and UPL Ltd. Both stocks have shown remarkable technical patterns on their respective charts, suggesting they are poised for strong upside movement.
- Jubilant Foods Ltd
Jubilant Foods Ltd, a leading player in the food industry, operates under the banner of Domino’s Pizza and Dunkin’ Donuts in India. The company has consistently expanded its footprint across the country and has established itself as a market leader in the quick-service restaurant sector.
Source: TradePoint, Definedge Securities
On the daily chart, the stock is currently taking support at the 200-EMA (Exponential Moving Average) channel, which is formed using both the high and low of the 200-day EMA and often acts as a strong support level.
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