This week's Chart of The Week revisits a topic we've written about many times over the last few years, Small-Caps vs Large-Caps.

Going through our universe of coverage I noticed weakness in the Rupee over the last week, so this post is going to help put that into the perspective of the longer-term trend and outline how we're approaching it.

About ten days ago we outlined why it appeared Indian Equities were due for a pause from a tactical perspective and that's what we're getting.

With no movement in the major averages, there's nothing to do, right?

Wrong!

In this post, I outline a few of the stocks we're watching and why they're important.

Thursday we looked at two lagging sectors that have been developing signs of a potential bottom like we saw in Energy, Autos, and others several months ago.

Today I want to follow up on that post by diving into the Nifty PSU Bank Index components to see if what we're seeing there supports the action that's occurring in the equally-weighted index.

In September we saw a massive spike in the number of new 63-day highs in the Nifty 500's components.

Today I want to take a look at look at the data and answer the questions how rare is this signal? and what are the forward returns?

The Nifty Public Sector Bank and Media sectors of the market have been laggards for a while, but we're now beginning to see signs that rotation into these areas is ahead.

Stocks around the globe have been making new highs as of late, rallying over the past several weeks and months.

Will it continue or are we due for some consolidation first?

Let's take a look.

The trend for NIFTY stocks is up. That has not changed. Like many stocks and indexes around the world, NIFTY been mostly stagnant since early 2018. Unlike most stocks and indexes, however, NIFTY has managed to put in higher lows and higher highs along the way. So it's not just a consolidation.

I do believe NIFTY resolves this consolidation higher and heads up towards 13,000 - this is the target:

Today we're looking at our updated Monthly Chartbooks to identify the structural trends in India's major indices, sectors, and stocks.

The mean reversion we outlined a few weeks ago has been playing out, but now the major indices are running into sellers at very logical levels.

With that said, one area looks particularly vulnerable at current levels, Pharma.