Nifty Finds Support at its 21-DMA; Nifty Pharma at 5-Year High

Weekly Action

Nifty, +0.4%; Sensex, -0.02%; Nifty Midcap, +3.8%; Nifty Smallcap, +6.0%; Model Portfolio, +4.0%.

Market Pulse Uptrend Under Pressure

Distribution Day Count: Six

Weekly Market Review

Nifty moved in a relatively narrow range compared with the previous weeks. Through the week, it traded near its 21-DMA. On Friday, Nifty opened on a positive note and traded in positive territory for most of the session. Post 2pm, sharp selling in financial stocks dragged the market to negative territory. It lost around 140 points in a span of 30 minutes. Later, some recovery was seen as Nifty pared most of its losses.

During the week, the index added one distribution day (Monday). However, distribution day registered on August 14 expired today. Overall, the index has six distribution days.

This week, the reaction on sectoral indices were mixed. Nifty Pharma (+8.9%) was the biggest advancer, followed by Nifty IT (+6.4%), and Realty (+5.5%). On the flipside, Nifty Financial (-4.5%) and PSU Bank (-3.9%) were the major decliners.

As the market is in an Uptrend Under Pressure, investors should proceed ahead with caution. Unless a stock shows exceptional fundamental and technical strength, no new addition to the portfolio is advised. Investors should consider booking profits in stocks that have performed well and advanced 20–25% from their ideal buy points. Looking forward, we will change the status to a Downtrend, if more distribution days are added or if Nifty breaches its 50-DMA and 200-DMA. On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 11,795 level (high during the recent rally).

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