Market Status Back to a Confirmed Uptrend; Pharma Stocks Outperform

Nifty, +1%; Sensex, +0.9%; Nifty Midcap, +1.5%; Nifty Smallcap, +1.2%; Model Portfolio, +2.1%

Market Pulse Confirmed Uptrend

Distribution Day Count: Six

Nifty gapped higher this morning and gained strength as the day progressed. It crossed 14,754 and made a new high. Sensex closed above 50,000 for the first time. Volume was higher than average but lower compared to yesterday’s session. After underperforming benchmark indices for a couple of sessions, broader indices outperformed today. Advance-decline ratio was skewed toward advancers. Out of 2,222 stocks, 1,165 advanced and 703 declined. On the sectoral front, barring Nifty FMCG (-0.1%) and Realty (-0.4%), all other indices closed in the green. Nifty Bank, Auto, and Financial Services continued their rally and gained more than 1% each. Nifty Pharma was the outperformer with a gain of 2.8%.

Last week, market status was changed to an Uptrend Under Pressure due to a rise in distribution days and Nifty breaching its 21-DMA. Today, Nifty made a new high and moved above the previous rally high of 14,754. Hence, we changed the market status to a Confirmed Uptrend. However, the distribution day count remains elevated at six. Nifty is more than 3% above its 21-DMA. If 21-DMA is breached, we may downgrade the status to an Uptrend Under Pressure. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.