Nifty 50 Index

Nifty50 Vs Nifty SmallCap 100

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This ratio chart between LargeCaps and SmallCaps has been a good retail sentiment indicator. At the extremes, it has been a good contrarian indicator

When large-cap underperformance reaches an extreme low and starts to reverse, like in 2024 Sep, one of the 3 scenarios unfolds and seems to last 18 to 24 months

1. Both LargeCaps and SmallCaps correct, but SmallCaps correct even more
2. LargeCaps are relatively stable but SmallCaps are correcting
3. LargeCaps are rallying and SmallCaps are yet to catch up

Let's see if Scenario 1 >>> Scenario 2

Ps: This is NOT an investment advice

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