Nifty Continues to Scale Fresh Highs; Realty and IT Stocks Lead

Nifty, +0.3%; Sensex, +0.3%; Nifty Midcap, +0.4%; Nifty Smallcap, +1.1%; Model Portfolio, +1.0%

Market Pulse: Confirmed Uptrend

Distribution Day Count: One

Nifty started the session on a record high and quickly made a new all time high of 17,429. It was a less volatile session as Nifty traded within a range of 85 points. Volume was lower than in the previous session, which is a sign of concern. In the broader market, Nifty Midcap and Smallcap advanced 0.4% and 1.1%, respectively.

It was a mixed reaction on the sectoral front. Nifty Realty (+3.2%), IT (+1.5%) and Media (+1.3%) were the top gainers for the day. Nifty Pvt Bank (-0.5%) was the top decliner. The advance-decline ratio was in favor of decliners. Of 2,053 stocks traded, 978 stocks advanced, 985 stocks declined, and the remaining closed flat.

Two distribution days expired last week, decreasing the count to just one. Further, Nifty is now trading near its all-time high and is placed above all its key moving averages. We would like the index to continue this trend. After such a sudden rally, one must also be prepared for some mild 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.

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