Nifty Rebounds Sharply; Distribution Day Expires

Nifty, +1.6%; Sensex, +1.5%; Nifty Midcap, +1.8%; Nifty Smallcap, +2.1%; Model Portfolio, +3.0%

Market Pulse Confirmed Uptrend

Distribution Day Count: Four

Nifty opened over 150 points higher and hit the day’s high of 14,806. It traded in a narrow range consolidating gains amid volatility and closed the session holding decent returns. Volume was lower than the previous session. In the broader market, both midcap and smallcap outperformed to close with a gain of 1.8% and 2.1%, respectively.

Barring Nifty PSU Bank (-0.4%), all the sectoral indices closed in the green. Nifty Media (+4.3%) advanced the most followed by Nifty Auto and Nifty Metal, which advanced 2.4% and 1.9% for the day. Advance-decline ratio was skewed toward advancers. Out of 2,287 stocks, 1,285 advanced, 672 declined, and the remaining were unchanged.

Today one distribution day (22/1/2021) expired due to aging, after which the total count decreased to four. A couple of more distribution days will expire this week. Nifty is 2.2% above its 50-DMA. If 50-DMA is breached, we may downgrade the status to an Uptrend Under Pressure. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.