2 buy recommendations from Aditya Agarwala
Aditya Agarwala, Co-Founder & Director, Invest4edu, says “correction in the broader markets is around the corner because clearly if you take a look at high time frame charts, if you plot the indicators on a high time frame chart – I am talking about RSI here – you clearly get extreme overbought levels on the monthly and the weekly chart time frame. This is not something which comes across so often and so frequently.”
What do you make of the sudden sharp downtick that we are seeing in the midcaps and smallcaps? Is it a one-day move? Is it like a knee-jerk reaction or it is a reversal of trend now and midcaps and small caps are headed lower?
To be honest, this is something that I have been talking about for some time, correction in the broader markets is around the corner because clearly if you take a look at high time frame charts, if you plot the indicators on a high time frame chart – I am talking about RSI here – you clearly get extreme overbought levels on the monthly and the weekly chart time frame. This is not something which comes across so often and so frequently.
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Just to give you a small example, on the midcap index, the last time we saw overbought levels was in 2021, after which this index corrected about 20%, prior to that it was 2015 and prior to that it was somewhere around 2011 and 2008.
So, we do not see extreme overbought levels on these indices that frequently and when they come about extreme overbought levels, you usually see a correction or at least a
