RIL and HDFC Bank Push Nifty Higher; Godrej Consumer Products Q1 Results Beat Estimates

Nifty, +1.9%; Sensex, +2%; Nifty Midcap, +1%; Nifty Smallcap, +1.1%; Model Portfolio, +0.4%

Market Pulse Confirmed Uptrend

Today, Nifty had a gap-up start but found resistance near its 21-DMA and gave up the opening gains. After a volatile action in the opening hour, Nifty rebounded sharply and gained more than 200 points from its intraday low. Volume was lower compared to the last few sessions when selling pressure was high. Reliance Industries(+7%) and Hdfc Bank (+4%) were the major contributors to benchmark indices. Today’s rally was broad based where Nifty Midcap and Smallcap indices closed with notable gains. Market breadth was skewed toward advancers. Of 2,170 stocks traded, 1,200 advanced, 626 declined, and the remaining traded flat. Nifty closed more than 1% above its 21-DMA (10,965). We would like to see Nifty hold its 21-DMA. In case distribution day count increases and Nifty breaches its 21- and 200-DMA, we may downgrade the market to an Uptrend Under Pressure.

The Indian market remains in a Confirmed Uptrend. Despite the troubling action over the last few sessions, leaders rebounded sharply. We would like to see fresh names flexing their muscles for a sustainable rally. Finding favorable entries into powerful breakouts may be the best use for new money in the current market. However, things can change quickly due to high volatility. We are operating in an uncertain environment where information is distributed unevenly, wherein outside forces, either intentionally or unintentionally, affect prices across various time frames. We will continue to monitor the behavior of market and keep an open mind as to how it unfolds.

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