Charts show smallcaps have more room to correct relative to midcaps: Rohit Srivastava

economictimes.indiatimes.com:

Rohit Srivastava, Founder & Market Strategist, Indiacharts.com, says “we are right now in the process of taking the 20-week average. Once we do that, once we start staying below the 19,400 mark, which we are doing now for quite a while, then we are headed towards 18,900-18,800. So that is going to be the next level that we are going to be watching out for.”

What is your view on the charts? Do you think we could see a further fall for the benchmark indices?
My sense is that markets have weakened on daily and weekly timeframes. We are seeing sell signals on momentum indicators for the key indices and what that really means is that we are right now in the process of taking the 20-week average. Once we do that, once we start staying below the 19,400 mark, which we are doing now for quite a while, then we are headed towards 18,900-18,800. So that is going to be the next level that we are going to be watching out for. It possibly could happen in the next couple of days the way it is moving right now. We will watch the current action till Friday or Monday.

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Simultaneously, we are also looking at a similar weakness in maybe global equities even though they did bounce overnight. The overall trend does not reverse by a one-day move because throughout last week, we were seeing a decline in US equities. So, unless we see a reversal in these trends, we should be looking for further downside and that is the starting point.

Let us just talk about some of these metal names. What is the