Market Health Check: Where Strength Lies & Where Caution Is Needed

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Market Health Check: Where Strength Lies & Where Caution Is Needed

When we analyze how many stocks are down 25% or more from their 52-week highs, the picture becomes very clear:

Nifty 50 → Only 6% corrected
Strongest pocket of the market
Leadership, stability, institutional support

NiftyNext 50 → 22% corrected
Moderate strength
Selective opportunities

Midcap Index → 31% corrected
Mixed zone
Stock-specific strength, but caution needed

Smallcap Index → 51% corrected
Clear weakness
Broad stress, lack of follow-through buying

Microcap Index → 66% corrected
Deep risk zone
High volatility, low liquidity, avoid bottom-fishing

🧭 What This Means for Investors

Stay aligned with strength— Largecaps continue to show leadership and resilience.
Be selective in midcaps — Only quality and trend-supported names deserve capital.
Reduce exposure to smallcaps & microcaps— More than half the universe is in deep correction, signalling structural weakness.
Follow market trends, not hopes — Price damage this large usually reflects sentiment, liquidity, and fundamental concerns.

Simple Takeaway

Markets are telling you where to stay invested and where to step aside.

Strength = Nifty & quality largecaps
Risk = Smallcaps & microcaps

Let data guide decisions, not emotions.

Nishesh Jani,CFTe

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