Nifty Closes Flat; Metal, Pharma, and Auto Stocks Underperform

Nifty, +0.01%; Sensex, +0.01%; Nifty Midcap, +0.2%; Nifty Smallcap, +0.2%; Model Portfolio, +0.9%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Today, Nifty traded in a narrow range amid intraday volatility. The index closed flat for the second consecutive session. Volume was lower than in the previous session. Further, the index is currently trading 2.2% and 4.1% above its 21- and 50-DMA, respectively. The broader markets extended their gains. Midcap and Smallcap were up 0.2% each.

On the sectoral front, Mixed results were observed. Nifty FMCG (+0.6%) led the gains followed by Nifty Realty and Nifty Fin Service which gained 0.3% and 0.2%, respectively. On the flip side, Nifty Metal, Nifty Pharma, Nifty PSU bank, and Nifty Auto were down 0.5–1.3%. The advance-decline ratio was in favor of decliners. Of 2,004 stocks traded, 724 stocks advanced, 751 stocks declined, and the remaining closed flat.

The distribution day count currently stands at four. Nifty is trading near its all-time high. If the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important. Further, in the broader market, we recommend that investors be selective when investing in new stocks.