Nifty Faces Resistance at 200-DMA; Yes Bank Declines After FPO Proposal

Nifty, +0.3%; Sensex, +0.3%; Nifty Midcap, -0.2%; Nifty Smallcap, +0.1%; Model Portfolio, +1.6%.

Market Pulse Confirmed Uptrend

Nifty, taking cues from global markets, opened around 80 points higher and retook its 200-DMA. However, it quickly succumbed to selling pressure and gave up all its gains. The last hour of the day’s trade helped Nifty to end in the green, but it failed to close above its 200-DMA. In the broader market, Nifty Midcap closed with a loss of 0.2%, and Smallcap closed with a gain of 0.1%.

It was a mixed reaction on the sectoral front. Nifty IT (+1.6%) and Metal (+1.3%) were the biggest advancers, whereas Nifty PSU Bank (-1.6%) and Realty (-1.6%) were the major decliners. Market breadth was inclined toward decliners. Of 2,186 stocks traded, 1,079 advanced, 777 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying. The O'Neil Methodology is a process to isolate leading stocks and buy them after a period of consolidation in order to be able to capitalize on an emerging trend. It is prudent to 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.

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