Mid-Cap Index is the index to watch out for.

As we have discussed in previous educational messages. By selecting the indices that are looking strong we can get a range of stocks that can do well. From that basket of stocks you can then further scrutinize and select the stocks that might preform the best based on charts and fundamentals of the companies.

This week let us look at the Mid-Cap index that took a dramatic beating and is finding a support from where it can regain lost ground and even surpass the recent highs. Midcap Index made a high of 51342 before the descend began. The index has taken a support at the mid channel which also happens to be a trend line support. If the support or the low of Friday which was 48605 is not broken then we will see the comeback of Mid-cap stocks and index.

Resistance levels for the Mid-Cap index going forward will be 49545, 50132, 50425, 50802 and finally the previous high of 51342. The channel top seems to be near 52399 if the highs of 51342 are broken and sustained in future.

Support levels for the Mid-Cap index in case the support at 48605 is broken will be near 47952 or 46928 which seems to be the channel bottom. Choose wisely from the Mid-cap stock basket while keeping an eye on the levels mentioned here. Happy Investing.