Nifty Cools Off After Hitting a Fresh All-Time High; Broader Market Indices Continue to Underperform

Nifty, +0.2%; Sensex, +0.2%; Nifty Midcap, +0.01%; Nifty Smallcap, -0.6%; Model Portfolio, -0.3%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Nifty started the session on a flat note and quickly lost over 80 points to make an intraday low of 16,210. Then the index observed good buying and hit a fresh all-time high of 16,349. There was some profit booking in the last hour and the index closed the session near 16,300. The broader market indices continued to underperform as Midcap ended flat and Smallcap closed 0.6% lower.

On the sectoral front, the majority of indices closed lower. Nifty Metal (+1.3%) was the top gainer, followed by IT (+0.8%) and FMCG (+0.6%). On the flip side, Nifty PSU Bank (-2.2%) and Media (-1.6%) were the major decliners. The advance-decline ratio favored the decliners. Of 1,998 stocks traded, 645 stocks advanced, 1,294 stocks declined, and the remaining closed flat.

Currently, the distribution day count stands at three. Nifty is trading near its all-time high. But the broader market action was not very constructive. We will continue to follow the action of leaders and look for constructive behavior and potential entry points to develop. If the index adds a couple of distribution days, stages a reversal, and breaches key moving averages, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging from sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

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