Nifty Finds Support at 10-DMA; Metal and Media Stocks Outperform

Nifty, -0.8%; Sensex, -1%; Nifty Midcap, +0.6%; Nifty Smallcap, +0.8%; Model Portfolio, -0.2%

Market Pulse Confirmed Uptrend

After a gap down opening, Nifty traded in a narrow range and was highly volatile in light of weekly F&O expiry. It closed significantly lower. Volume was on the higher side compared with the previous session. Further, the index found support at its 10-DMA (11,294) and closed 0.10% above it. Today’s action qualified as a distribution day as the index declined more than 0.2% on higher volume than the previous session. Broader markets kept the gaining momentum intact and outperformed the leading indices with the Nifty Midcap and Smallcap closing with gains of 0.8% and 0.6%, respectively.

On the sectoral front, it was a mixed action. Nifty Media continues to lead the rally with a gain of 3% followed by Nifty Metal which advanced more than 1%. On the flip side, Nifty PVT Bank (-1.4%) and Nifty Bank (-1.4%) were the top two decliners. Market breadth was skewed toward advancers. Of 2,187 stocks traded, 1,029 advanced, 806 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. We would like to see fresh names flexing their muscles for a sustainable rally. Finding favorable entries into powerful breakouts may be the best use for new money in the current market. However, things can change quickly due to high volatility. We are operating in an uncertain environment where information is distributed unevenly, wherein outside forces, either intentionally or unintentionally, affect prices across various time frames. We will continue to monitor the behavior of the market and keep an open mind as to how it unfolds.

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