Nifty Mid Cap Volumes Tell Different Story !!!

NIFTY MID CAP VOLUMES LEAD NIFTY VOLUMES

Price, Volume and Time (PVT) are the only drivers for markets. Rest all is rationalization. PVT always foretells about turning points.

The idea of the post is not to arrive at any conclusion but rather present a picture of Nifty peaks and behavior of volumes (value and quantity).


Nifty Peaks and Volumes

1) Typically prior to peaks volumes are much lower with sudden burst in volumes. Post peaks volumes again tappers off and comes back to pre peak levels.

2) Post 2007-2008, Nifty peaked precisely in the month of peaking volumes .i.e both during 2010 November peak and Feb 2012 peak. During 2007, volume peaked in October 2007, while Nifty peaked in Jan 2008.

3) Nifty's recent high has happened after volume peaked in September 2012. However, interesting developments happened in Nifty Mid Cap with respect to volumes.

Nifty Mid Cap Peaks and Volumes

1) Nifty Mid Cap recent behavior is very different to Nifty with respect to volume action. Nifty and Nifty Mid cap typically peaked together both in terms of volume and price till now.

2) Recently however, Nifty volume peaked in September 2012. while, Nifty Mid Cap Volumes have continued to expand post sep 2012. December 2012 average daily volume stood @ Rs 1863cr ( vs Rs 1484cr for September 2012)

3) Nifty's daily average volume during Sep 2012 was still far below daily avg volume during Feb 2012 peak (Rs 9k cr Feb 2012 vs Rs 6.5kcr Sep 2012), while Nifty Mid Cap volumes are very close to Feb 2012 peak (Rs 1941cr vs Rs 1863cr Dec 2012).


The above data could mean following....
1) Retail participation is very much there (which is required for meaningful top). 

2) Nifty made recent high on much lower daily average volume compared to previous peaks.