Nifty Rallies Closer to its 200-DMA; Barring Nifty Pharma, All Sectors Close in the Green

Nifty, +1.5%; Sensex, +1.3%; Nifty Midcap,+ 1.7%; Nifty Smallcap, +1.8%; Model Portfolio, +1.3%

Market Pulse : Confirmed Uptrend

After a gap-up opening, Nifty kept the positive momentum intact and formed higher highs in the hourly chart to trade toward the day's high of 10,811. However, it witnessed a minor profit booking in the last hour and closed near 10,760. In the process, the index came further close to its 200-DMA (10,885). Volume was higher than that of the previous session. In the broader market, Nifty Midcap and Smallcap closed with a gain of 1.7% and 1.8%, respectively.

On the sectoral front, barring Nifty Pharma (-0.6%), all the sectoral indices closed in the green. Nifty Realty (+3%) gained the most, followed by Nifty Auto, which was up more than 2.8%. Market breadth was inclined toward advancers. Of 2,157 stocks traded, 1,120 advanced, 719 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying. The O'Neil Methodology is a process to isolate leading stocks and buy them after a period of consolidation in order to be able to capitalize on an emerging trend. It is prudent to only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.