- The Nifty Midcap 100 index is currently testing the neckline (16228) of a Double Top pattern
- The index today has moved below the 50-day EMA support for the first time in 4 months
- Meanwhile, the daily RSI of price has declined to the lowest level since April
- Also, the daily ATR of price continues rising from 6-month lows, indicating volatility is picking up
- So far today, the index has managed to bounce slightly after touching the neckline
- That said, sustainability below the neckline of 16228 would expose the index for a 7-8% correction in the short-term (the width of the Double Top pattern)
- Hence, caution is warranted in Midcap stocks in the short-term.
To learn more about the Double Top pattern, click here on this School of Stocks link.