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Nifty Reclaims 21- and 50-DMA; Nifty Bank Gains 6% During the Week

Posted Date: October 01 2020
Weekly Action

Nifty, +3.3%; Sensex, +3.5%; Nifty Midcap, +3.8%; Nifty Smallcap, +3.7%; Model Portfolio, +3.6%.

Market Pulse Rally Attempt

Weekly Market Review

Continuing last Friday's momentum, Nifty started the week on a positive note. On Tuesday, we changed the market status to a Rally Attempt as Friday (September 25) was a blue rally day (Day 1) and Nifty managed to stay above its Day 1 low for two consecutive sessions. Today, the momentum was very good led by Banking stocks and Nifty closed 1.5% higher. But the volume was lower compared with yesterday’s session, so we will not consider today’s session as a follow-through day.

On the sectoral front, all the indices closed in the green for the week. Nifty Bank (6%) and Financial Services (+5.9%) were the top performers. Nifty Auto, Metal, and Realty closed 3–4% higher. Today, the advance-decline ratio was skewed toward advancers. Of 2,209 stocks traded, 1,126 advanced, 693 declined, and the rest remained unchanged.

Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.

What do you think? Please email us any questions or comments.

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