Nifty, -1.1%; Sensex, -1.1%; Nifty Midcap, -0.6%; Nifty Smallcap, -0.7%; Model Portfolio, -0.3%
Market Pulse Uptrend Under Pressure
Distribution Day Count: Five
Nifty gapped lower this morning and remained weak throughout the session. On the downside, Nifty found support near its 50-DMA. Though Nifty closed 1% lower, volume was less compared to yesterday. So, we will not mark today’s session as a distribution day. Selling pressure was comparatively less in the broader market. Overall advance-decline ratio was 1:1. On the sectoral front, barring Nifty Bank (+0.2%) led by 5%+ gain in Axis Bank, all other sectoral indices closed in the red. Nifty FMCG, IT, and Realty dropped closed around 2% lower. Nifty Pharma, Metal, and Financial Services closed 0.5–1.0% lower.
Yesterday, we downgraded the market status to an Uptrend Under Pressure as 1) Nifty was trading below its 21-DMA. 2) Distribution day count was at five. 3) Nifty dropped more than 5% from its recent high. 4) Overall market breadth was weak. We will continue to monitor the market and look for signs of regaining strength or further weakness. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and/or showing technical weakness. We will change the status to a Downtrend, if the number of distribution days increase, Nifty breaches the 50-DMA, and leadership remains weak. On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 14,754 (high during the recent rally).