Nifty, -0.4%; Sensex, -0.5%; Nifty Midcap, +0.3%; Nifty Smallcap, +1%; Model Portfolio, +0.5%
Market Pulse: Downtrend
Nifty gapped higher this morning and moved above 14,500. However, selling pressure increased as the day wore on and Nifty turned negative. On the downside, it did not breach yesterday’s low, so we will count today as day 1 of an attempted rally. Broader indices closed in the green, outperforming benchmark indices. On the sectoral front, there was mixed action. Nifty IT (-1.4%) was the top loser. Nifty Bank, Financial Services, and FMCG closed 0.2–0.6% lower. On the flip side, Nifty Pharma and Auto closed more than 1% higher. The advance-decline ratio was in favor of advancers. Of the 2,250 stocks traded, 1,071 advanced, 796 declined, and the rest remained unchanged.
We had changed the market status to a Rally Attempt from a Downtrend on Friday after Nifty managed to hold above the previous correction low (14,248) for three consecutive days. But yesterday, as it breached that low, we are back in a Downtrend. Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above yesterday’s low (14,192) for two more sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing best relative strength with good accumulation.