Nifty Adds a Distribution Day; Midcaps Underperform

Posted Date: June 16 2021
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Today’s Action
 
Nifty, -0.6%; Sensex, -0.5%; Nifty Midcap, -0.9%; Nifty Smallcap, -0.5%; Model Portfolio, -0.3%.
 
Market Pulse: Confirmed Uptrend
 
Distribution Day Count: Two
 
Nifty started the session on a flat note and quickly started to fall. After noon, it observed buying at the dip, but a sell-off in the last hour ensured Nifty ended near the day’s low. Today’s action qualified as a distribution day as the fall was more than 0.2% on volume higher than yesterday’s. It was a broad-based sell-off today as broader market indices Nifty Midcap (-0.9%) and Smallcap (-0.5%) also close in the red. Barring Nifty FMCG (+0.6%) and IT (+0.3%), all the sectoral indices closed lower. Nifty Media (-2.9%) and Realty (-1.3%) declined the most. The advance-decline ratio was in favor of decliners, as out of 2,263 stocks traded, 662 stocks advanced, 1,286 stocks declined, and the remaining closed flat.
 
Addition of distribution days is a sign of weakness in the market. However, the count remained at two as one distribution day expired today. If the index falls, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.
 
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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.
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