Nifty Hits Fresh High; Broader Markets Continue to Outperform

Nifty, +1.4%; Sensex, +1.4%; Nifty Midcap, +1.9%; Nifty Smallcap, +1.5%; Model Portfolio, +1.2%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Today, Nifty opened 70 points higher and continued to gain momentum throughout the session. The index made higher highs and higher lows on the hourly chart and closed the day holding significant gains. In the process, Nifty hit a fresh high. Volume was higher than in the previous session. The broader markets continue to outperform. Further, Midcap and Smallcap surged 1.9% and 1.5%, respectively.

On the sectoral front, barring Nifty IT (-0.6%), all sectors gained for the day. Nifty Metal (+2.5%) led the gains, followed by Nifty Bank, Nifty PSU Bank, Nifty PVT Bank, which gained 2% each. Further, Nifty Auto, Nifty Realty and Nifty Fin Service were up in the range 1.6–1.9%. The advance-decline ratio was in favor of advancers. Of 2,057 stocks traded, 1,395 stocks advanced, 581 stocks declined, and the remaining closed flat.

The distribution day count now stands at three after one expired last week. Further, Nifty is now trading near its all-time high and is placed above all its key moving averages. We would like Nifty to continue this trend. On the flip side, if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.