Nifty, +1%; Sensex, +1.1%; Nifty Midcap, +0.8%; Nifty Smallcap, +1.1%; Model Portfolio, +0.7%
Market Pulse: Rally Attempt
Nifty gapped higher this morning as Banks traded higher after ICICI Bank released good Q4 FY21 results. As the session progressed, Nifty was able to hold gains, but could not move beyond its opening hour high. We shifted the market to a Rally Attempt as the index managed to stay above its recent low (14,151) for three consecutive sessions. On the sectoral front, barring Nifty Pharma (-0.8%), all other sectors gained, led by Nifty Realty (+3.4%). Nifty Bank, Financial Services, and Metal closed 1.2–2.0% higher. The advance-decline ratio was in favor of advancers. Of the 2,293 stocks traded, 1,239 advanced, 660 declined, and the rest remained unchanged.
Looking ahead, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume higher than the previous day. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing the best relative strength with good accumulation. On the flip side, Nifty is still below its 50-DMA and about 6% off its last high. So, if it breaches its recent low of 14,151, the market will be moved back to a Downtrend.