Nifty Ends Higher for Fourth Consecutive Week; IDFC Plans to Divest Mutual Fund Business

Nifty, +1.2%; Sensex, +1.2%; Nifty Midcap, +1.9%; Nifty Smallcap, +0.9%; Model Portfolio, +1.4%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Weekly Market Review

Nifty continued its positive momentum for the fourth consecutive week. After a muted start to the week, it made a fresh all-time high in the last four trading sessions. Today, it gapped up over 17,700 and made a new all-time high of 17,792. However, profit booking was seen across markets and the index fell more than 250 points from its all-time high. Of the 2,019 stocks traded, 576 advanced, 1,370 declined, and the rest remained unchanged.

Barring Nifty Metal (-1.4%) and Realty (-0.9%), all sectoral indices closed higher. Nifty Media (+13.3%) was the top gainer, followed by financial-related indices, which advanced 3-5%. Except for Nifty Bank and Auto, all sectoral indices are in a Rally. The following table indicates the market status of the various indices and their distribution day count.

As the index fell more than 0.2% on volume higher than yesterday’s session, we will consider today’s action as a distribution day. The current distribution day count of two is not a sign of concern, given the other factors. Nifty is 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.