The midcap rally is again spreading to the 'cats and dogs of the world', and are poised for another round of shakeout, says Anuj Singhal, Stocks Editor, CNBC-TV18. However, this is a bull market and it is highly likely that stocks will continue to climb after every correction, he said.

On the rally in ITC, he said that it was a matter of "when" and not "if" the stock will rerate. "There is too much value in ITC to be ignored--dividend yield, pedigree, cheap valuation. The market is unhappy about the manner in which the company is using its cash flows, and that there has been no progress on the value unlocking of various businesses. The day ITC announces a demerger, the stock will jump 20 percent and when the demerger happens, the stock will double. Also, with ITC, the downside risk is limited," he said.

Singhal says IT stocks may still have some steam left despite the recent rally.

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