Nifty, -0.7%; Sensex, -0.8%; Nifty Midcap, -0.7%; Nifty Smallcap, -0.8%; Model Portfolio, -0.5%
Market Pulse Confirmed Uptrend
Distribution Day Count: Four
After a muted opening, Nifty was under selling pressure and dropped 300 points from the day's high. However, in the last couple of hours, Nifty recovered more than half of its intraday losses and closed 0.7% lower. But, it failed to reclaim its 21-DMA. Today’s session will not be considered as a distribution day as the volume was lower compared with Friday. On the sectoral front, Nifty Pharma, Bank, Financial Services, Auto, and Media closed 0.5–1.5% lower. On the flip side, Nifty IT (+0.4%) and Metal (+0.9%) closed higher. Advance-decline ratio was in favor of decliners. Out of 2,283 stocks, 675 advanced, 1,274 declined, and the rest remained unchanged.
WPI inflation for February came at 4.17% compared with 2.2% in January 2021. WPI inflation came at a 27-month high, mainly due to higher crude oil and fuel prices.
Market Status Overview
-Last week, one distribution day was added, taking the total count to four. Since last few days, Nifty was oscillating around its 21-DMA but breached it today. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.
-Looking ahead, we may downgrade the status to an Uptrend Under Pressure if Nifty slips further below its 21-DMA and/or the distribution day count increases to five. Further, we may downgrade the status to a Downtrend if Nifty breaches its 50-DMA, distribution day count remains elevated, and leading stocks break below key support levels. On the flip side, the confidence on uptrend will enhance if Nifty makes a move toward a new high or stages an additional follow-through day.