Nifty, -1.8%; Sensex, -2.2%; Nifty Midcap, +0.8%; Nifty Smallcap, +0.6%; Model Portfolio, +1.4%
Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
Weekly Market Review
Nifty had a run of profit booking and corrected toward its 21-DMA during the week. Barring Monday, the index closed in the red for all trading sessions. Today, it gapped down nearly 90 points and remained volatile throughout the day. Though the index declined more than 0.2%, the volume was lower than in the previous session. This helped the index escape an additional distribution day. Of the 2,036 stocks traded, 740 advanced, 756 declined, and the rest remained unchanged.
On the sectoral front, Nifty PSU Bank (+6.1%) staged a reversal and emerged as the top gainer for the week. Similarly, Nifty Energy gained 5.9% for the day, followed by Nifty Metal and Nifty Pharma, which were up 2.6% and 2.1%, respectively. On the flip side, Nifty IT (-6.3%), Nifty Financial (-2.6%), and Nifty PVT Bank (-2.5%) closed as the top decliners for the week. Most of the indices are in a Rally. The following table indicates the market status of the various indices and their distribution day count.
Nifty closed near its 21-DMA (17,530) in the week. We would like the index to stage a reversal from there and initiate the next leg of the rally. On the flip side, the distribution day count rose to three this week. 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 Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.