Relative performance is normally a concept that is used more in price action-based trading. However, sometimes, these concepts are equally useful when trying to gauge the mood of the market for a segment of stock. There cannot be a doubt about how the market has been hit by global headwinds, but if one compares the relative performance of small caps in the last four trading sessions and the one it witnessed in March 2024, there is clear evidence that at this point of time, there is no tearing hurry to sell. While it might be a bit early to say, the way things are panning out at this point in time, the probability of small caps making a comeback cannot be ruled out. The only thing that needs to be watched is how the market reacts to their Q4 earnings, if the initial reaction to results is positive that means liquidity is still chasing the smallcap and why to fight liquidity.
