Nifty Erases Intraday Gains; Auto Stocks Outperform

Nifty, +0.2%; Sensex, +0.03%; Nifty Midcap, +0.1%; Nifty Smallcap, +0.5%; Model Portfolio, +0.6%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Today, Nifty gapped higher by almost 100 points and gained more strength in the opening hour. It came close to its all-time high of 15,901, but failed to make a new high. However, Sensex made a new all-time high of 53,057. After the opening hour, the market gradually came under selling pressure and surrendered gains. The broader market also failed to hold its opening gains. On the sectoral front, Nifty Bank reversed more than 400 points from its intraday high, dragging Nifty down. Barring Nifty Auto(+1.2%) and IT (+0.5%), all other sectoral indices closed flat to negative.  The advance-decline ratio was in favor of advancers, as out of 2,261 stocks traded, 1,159 stocks advanced, 780 stocks declined, and the remaining closed flat.

We will continue to monitor the action for signs of health or crack in the market and leaders. The distribution day count currently stands at three. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News