MarketsmithIndia Articles

Nifty Breaches 21-DMA; Auto Stocks Outperform

Author: Rushit Sejpal

Posted Date: November 16 2021 | Reading Time: 2 Minutes
Daily Action

Nifty, -0.6%; Sensex, -0.7%; Nifty Midcap, -0.3%; Nifty Smallcap, +0.5%; Model Portfolio, -0.2%.

Market PulseConfirmed Uptrend

Distribution Day Count: Four

Today, Nifty had a muted start, briefly opening higher. Though it failed to trade in the green, the index traded in a very narrow range. In the second half, it came under selling pressure and slipped below 18,000. It also closed below its 21-DMA. Nifty escaped adding a distribution day as the volume was low. The index was under pressure mainly due to weakness in banking stocks and RIL. The broader markets also closed off highs.

Source: Google Image

It was a mixed reaction on the sectoral front. Nifty Auto closed 2.5% higher. All Auto-related stocks were in momentum on some reports that mention normalizing chip production. Nifty IT closed 0.5% higher. Nifty Bank, Financial Services, FMCG, Pharma, and Oil & Gas closed 0.5–1.5% lower. Today, of the 2,084 stocks traded, 895 advanced, 1,103 declined, and the remaining closed flat.

Top Nifty50 Gainers and Losers (Source: NSE)

The distribution day count currently stands at four. If the market succumbs to selling pressure and breaches its 50-DMA, we may change the market status to an Uptrend Under Pressure. Nifty is trading less than 1% above its 50-DMA. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

Key News

Hcl Technologies (Nse) bagged a multi-year deal from Euroclear Group.

Asian Paints will hike prices from December 5. It had earlier raised prices by 8–9% from November 12.

Meghmani Organics is entering into new, lucrative variant of white pigment titanium dioxide. It will set up a 33,000-ton production facility at a capex of Rs 400 crore in Gujarat.

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