Mid-cap stocks have been underperforming large-cap stocks for quite some time. Perhaps, this is a reason for the malaise in the broader market over the past year.
As you can see, it’s been trading in a longer-term channel and hit upside resistance in late 2016 / early 2017 at (1). And it has been heading lower ever since.
The decline is currently testing 8-year support (2) with momentum levels oversold and potentially creating a higher low. Mid-caps have rallied from these momentum levels in the past (see green markers).
A setup is in play for Mid-cap stocks to outperform Large-cap stocks. Stay tuned!
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Disclosure: I am/we are long MDY.