Nifty, +2.6%; Sensex, +2.7%; Nifty Midcap, +3.1%; Nifty Smallcap, +3.2%; Model Portfolio, +2.4%
Market Pulse: Confirmed Uptrend
Nifty extends gains by opening around 150 points higher taking cues from global markets. This is the fourth consecutive day of gains for Nifty; it reclaimed its 50-DMA last Wednesday. Volume was lower compared with the previous session. Today’s rally was broad based, as Nifty Midcap (+3.1%) and Smallcap (+3.2%) gains were more than the Nifty.
All the sectoral indices closed in the green. Nifty PSU Bank (+7.6%) led the rally followed by Nifty Metal, Financial Services, Media, Bank, Auto, Pvt Bank, and Realty which gained around 3-4%. The advance-decline ratio was inclined toward advancers. Of 2,143 stocks traded, 1,488 advanced, 324 declined, and the remaining traded flat.
The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions. We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. Only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.