Different Month, Same Issue

JC Parets
May 3, 2019

Last month price finally confirmed many of the divergences we were seeing under the surface and stocks began to correct...yet the Nifty 50 is sitting just shy of its all-time high.

What gives?

Here's the Nifty 50, sitting less than 1% off all-time highs as it works off a failed breakout and bearish momentum divergence through time, rather than price. While this is extremely constructive, the other market indexes aren't faring as well.

Click on chart to enlarge view.

For example, the Nifty Free Float Midcap 100 failed at the downtrend line from its 2018 highs and breaking down back below 17,750 to 8-week lows.

Small-Caps remain above the downtrend line from their 2018 highs, but are falling below support near 6,505 to 6-week lows.

Meanwhile, our Equally-Weighted index of the largest 10 stocks in India continues to grind to new all-time highs.

If Mid and Small-Cap stocks can't get their act together, it's going to be difficult for Large-Caps to make a sustainable move to new all-time highs.

There's no other way to put it.

As a result, we're remaining patient and sticking with the names on our list that continue to show relative strength.

Thanks for reading and let us know if you have any questions!

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Allstarcharts Team

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