Nifty Rallies Over 250 Points from Day’s Low; Realty and Metal Stocks Rally

Nifty, +0.9%; Sensex, +0.9%; Nifty Midcap, +0.6%; Nifty Smallcap, -0.1%; Model Portfolio, -0.2%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Today, volatility remained higher in the markets. Nifty started the session with a 50-point gain but quickly turned negative and made a low of 17,326. Later, there was strong buying at the lower levels as the index rallied over 250 points from the day’s low. Of Nifty50 stocks, 80% closed in the green, led by Jsw Steel (+5.7%) and Oil & Natural Gas (+5.2%).

On the sectoral front, all the indices closed higher, barring Nifty Auto (-0.5%) and PSU Bank (-0.1%). Nifty Realty (+3.6%) led the rally followed by Metal (+2.6%). Nifty FMCG, Media, IT, and Pharma, closed 1.1–1.9% higher. The advance-decline ratio was in favor of advancers. Of 2,023 stocks traded, 995 stocks advanced, 955 stocks declined, and the remaining closed flat.

The distribution day count currently stands at two. Further, Nifty is now trading above all its key moving averages. After a fall today, we would like the index to continue to trade above its key moving averages. After such a sudden rally, one must also be prepared for some mild 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.

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