While large-cap companies including Uber and Lyft have been in the spotlight in recent months, many companies are still at the small- and mid-cap phase when going public. Technicals suggest mid-cap stocks could remain out of favor for some time, as highlighted in All Star Charts Institutional’s Top 10 Charts of the Week.
“Mid-Caps are resolving lower from an 8-year topping pattern relative to the S&P 1500. After rallying to new all-time highs following the 2016 US election, mid-caps have been in a steady downtrend relative to their large-cap peers,” All Star Charts Institutional wrote in its most recent Top 10 note. “We want to be shifting capital away from mid-caps as long as this ratio is below the recent support that was breached ~0.53. After nearly a decade of sideways action, this appears to be the beginning of a structural downtrend, so we can expect mid-cap underperformance to continue for multiple years.”