Nifty, +0.7%; Sensex, +0.8%; Nifty Midcap, +0.4%; Nifty Smallcap, +0.4%; Model Portfolio, +1.2%.
Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
Nifty opened around 30 points lower. It was resilient compared to fall in the U.S. and Asian markets. In the first half, Nifty was trading in a narrow range of 30–40 points. However, in the second half, it started to gain some strength and moved above 17,800. It closed in the top quartile of the day’s range. The volume was comparatively higher. Recovery in the second half was led by Reliance, banks, and IT stocks. There was a mixed action on the sectoral front. Nifty Realty (-1.4%) was the top loser. Nifty Metal, Pharma, and PSU Banks closed 0.1–0.5% lower. On the flip side, Nifty Oil and Gas (+2.8%) was the top gainer. Nifty Bank, Auto, Financial Services, and IT closed 0.4–1.0 higher. The advance-decline ratio was in favor of advancers. Of 2,054 stocks traded, 1,216 stocks advanced, 770 stocks declined, and the remaining closed flat.
The distribution day count currently stands at three. Further, Nifty is trading above all its key moving averages. We would like the index to continue trading above its key moving averages. After such a sudden rally, one must also be prepared for some mild pullback and profit booking. In the process, 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.