Nifty Ends Session with Minor Cuts; Profit Booking in Realty and IT Stocks

Nifty, -0.1%; Sensex, -0.03%; Nifty Midcap, -0.3%; Nifty Smallcap, -0.1%; Model Portfolio, -0.4%

Market Pulse: Confirmed Uptrend

Distribution Day Count: One

Today, the markets were highly volatile. Nifty started the session on a slightly positive note and turned negative within the first 30 minutes of the session. After making the day’s low of 17,287, there was some buying as the index rallied by around 150 points to make a new all-time high of 17,436. But volatility continued as Nifty closed with minor cuts.

It was a mixed reaction on the sectoral front. Nifty FMCG, Media, and Fin Services closed 0.1-0.3% higher. Nifty Realty (-2.3%) was the top decliner, followed by IT (-1.3%) and PSU Bank (-1.3%). The advance-decline ratio was in favor of decliners. Of 2,005 stocks traded, 689 stocks advanced, 1,245 stocks declined, and the remaining closed flat.

Two distribution days expired last week, bringing the distribution day count down 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 Uptend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

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