Retail investors chase midcap and small caps because of perception that they will offer more returns in short period of time versus Large cap. But there is one situation where Large cap stocks look more promising over small and mid-caps - when they break out.
Take one example: Bank of America
As you can see in the chart above - Bank of America stock broke out and then rallied vertically 40% in following 4 months. Why take risk of small-cap when a large cap itself can rally like mad. Every breakout before breaking out gives ample signal before making the move
Will Large Banks drive the next phase of US Bull market - pretty interesting move in Bank of America stock?
— Deepak Singh (@smarket) July 19, 2016
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers