Midcap and the small cap index at key resistance levels after the bounce they have seen. Following charts will make it clear.
Small cap Index
Small cap index right at the resistance level. There is a good chance that we see the index turn down from here which will confirm the downtrend. Though with the lower low and lower high the index looks like it is in a downtrend already.
Above is the chart of the Small Cap Index.
The above chart of the midcap index also shows the resistance zone that the prices are encountering now.
Dollar index
Dollar which is a measure of how the cash is doing or in a way it is a measure of how the investors view holding cash rather than any asset is a good measure of the risk appetite.
We notice that it made a bottom in the December end of 2023 and since then it has been rallying. The chart is below
Crude
Crude oil is also rallying now and it has broken out of a key resistance level. This is quite an important development, if we see the commodity rally then it will put a lot of pressure on the equity markets especially if it is a sharp move up.
Interestingly this also put in a bottom in the middle of December. This will definitely put pressure on the inflation in India and it will be important to watch both the dollar index and the crude if this sustains.
Despite the above mentioned pressure on the markets there are pockets of strength in the equities and that is definitely coming from the pharma sector. The pharma stocks are breaking out again and have shown excellent strength. This could be a good sector to bet on given the kind of volatility that we have seen.