'Expect sharp pullback in midcaps; prefer Edelweiss Financial, CESC'

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26 Aug, 2025 12:21

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Arpan Shah

Midcap index near the upside breakout level

Midcap index has been in downward trend since January 2018 and fell nearly 30 percent from its top of 21,800 level and reached till 15,800 level.

Individual stocks have fallen even more and eroded lot of wealth in last 1.5 years. In this carnage even a good quality names have fallen off the cliff and lost up to 60-70 percent in this time. But after 1.5 years correction midcap index is near the upside breakout.

There are multiple technical factors which are supporting this theory. Nifty midcap 100 index halted its downward trend and started making higher top higher bottom formation on the daily chart.

It has recently given golden crossover on the daily chart as well. Golden crossover is the bullish signal in which a short term moving average crosses above long term moving average. A golden crossover indicates Bull market on the horizon.

We have seen 50 days moving average crossing over 200 days moving average on the daily chart. After this crossover Index has again came till its 200 days moving average which is a throwback and the buying opportunity.

Index is near the breakout level of the downward trendline and once it takes out 18,200 level we can expect a sharp pullback on the index level. Momentum indicator MACD has given positive crossover above 0 level. Above 18,200 the next target for index is at 20,000 level. Individual stocks can give even sharp upside than the index.

Edelweiss Financial: Upside: 35 percent

Edelweiss has been consolidating since last 6 months between Rs 130-200 levels and making a good bottom base. This base formation is the sign of the next upside breakout.

It has also made higher top higher bottom formation and Rs 160 should be kept as stop level. Once it takes out recent high Rs 205 then we can expect upside target of Rs 240-270 levels.

CESC | Upside: 20 percent

The stock has broken out from the good bottom base formation. It has also broken above downward trendline with momentum indicator supporting the breakout.

Stock is trading comfortably above important moving averages. The upside targets of the recent breakout are till Rs 840-900 levels with Rs 720 support level.

(The Author is Technical Analyst at Monarch Networth Capital.)

Disclosure: I do not have any direct or indirect financial interest nor any other material conflict of interest at the time of stock recommendation in the subject company. I do not have actual/beneficial ownership of one percent or more securities of the subject company. I do not own any stocks however his relatives might own few of the stocks in their portfolio.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.