Nifty, -0.5%; Sensex, -0.5%; Nifty Midcap, -0.4%; Nifty Smallcap, -0.02%; Model Portfolio, -0.5%
Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
Nifty started the session on a positive note and moved sideways in the first hour of today’s session before hitting the intraday high of 15,881. Subsequently, profit booking was seen across the indices, especially Pharma stocks. Today’s action qualifies as a distribution day as the fall was over 0.2% with volume being higher than the previous session. Among Nifty50 stocks, 66% closed lower. Dr. Reddy's Laboratories (-10.5%) and Cipla (-3.9%) were the major decliners.
On the sectoral front, the majority of the sectoral indices closed lower. Nifty Pharma (-4.3%) was the major decliner, followed by Nifty Pvt Bank (-0.9%) and Realty (-0.7%). The advance-decline ratio was in favor of decliners. Of 2,271 stocks traded, 838 stocks advanced, 1,117 stocks declined, and the remaining closed flat.
With today’s action, the distribution day count increased to three. Nifty breached its 21-DMA and is just 0.6% above its 50-DMA. If the index breaches the 50-DMA on higher volume and adds a couple of distribution days, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging from sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.