Nifty Breaches 21-DMA; Auto Stocks Outperform
Nifty, -0.6%; Sensex, -0.7%; Nifty Midcap, -0.3%; Nifty Smallcap, +0.5%; Model Portfolio, -0.2%.
Market Pulse: Confirmed 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.
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.
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