With the markets finding support at the 10,800 levels and resistance at 11,150 levels the broader markets sell-off seems to have abated and we could see a rally in the mid and small caps if the 10,800 level is defended by Nifty
The ratio is at the lower end of the channel on the weekly timeframe. Also note the longer lower range shadows which basically mean that even though the prices fell down during the week, they were able to recover and close higher. It points to higher demand at the lower levels. In this context we can interpret this as the sign that the broader markets may have ended their period of under-performance with respect to Nifty.
Any mean reversion that we see in the ratio now would mean that the mid and small cap stocks which have been battered could see a significant relief rally if the Nifty were able to hold its current low of 10,800 odd. If we get a Nifty rally itself then things may be even better.