Market Status Changed to Uptrend Under Pressure; RIL and Financial Stocks Underperforms

Nifty, -2%; Sensex, -2%; Nifty Midcap, -3%; Nifty Smallcap, -2.7%; Model Portfolio, -2.6%.

Market Pulse: Uptrend Under Pressure

Distribution Day Count: Six

Nifty opened 20 points higher but failed to hold gains and slumped more than than 500 points from there. Last week, Nifty breached its 21- and 50-DMA. Today’s action was marked as the sixth distribution day, and market status was downgraded to an Uptrend Under Pressure. Selling pressure was across the market. Nifty Midcap and Smallcap also breached their 50-DMA. Though markets recovered in the last hour, it was a tough day for market participants.

Source: Google Image

We will change the status to a Downtrend if more distribution days are added or if Nifty fails to reclaim the 50-DMA and market leaders show signs of deterioration in their price actions. On the flip side, the status will be changed back to a Confirmed Uptrend if Nifty retakes the 18,604 level (high during the recent rally). As the market condition has changed to an Uptrend Under Pressure, investors should proceed with caution. Stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.