Nifty, -0.6%; Sensex, -0.7%; Nifty Midcap, -0.7%; Nifty Smallcap, -0.5%; Model Portfolio, -0.6%.
Market Pulse: Confirmed Uptrend
Today, Nifty started the session on a positive note. However, it failed to hold above 17,900 and started moving downward in the opening hour itself. The index slipped further, breached its 10-EMA, and made a low of 17,576. The day did not end yet. In the last hour, Nifty staged an upside reversal and closed more than 150 points off lows. As the volume was higher than yesterday’s session, we will mark today’s session as a distribution day.
On the sectoral front, Nifty Oil and Gas (+1.3%) was the top gainer. Nifty Metal (+0.5%) and Pharma (+0.1%) closed higher. On the flip side, Nifty IT (-2.2%) lost the most. Nifty Bank, Auto, and Financial Services were down 0.5–1%. The advance-decline ratio was in favor of decliners. Of 2,042 stocks traded, 779 stocks advanced, 1,180 stocks declined, and the remaining closed flat.
Per the 25-session rule, one distribution day expired yesterday, but one was added today. So the count is back to two. Further, Nifty is trading above all its key moving averages. We would like the index to continue to trade above its key moving averages. After such a sudden rally, one must also be prepared for some mild pullback and profit booking. In the process, 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.