Nifty Reclaims 21-DMA; Hindalco Shares Rally after Q2 FY22 Results

Nifty, +1.0%; Sensex, +1.0%; Nifty Midcap, +1.5%; Nifty Smallcap, +1.3%; Model Portfolio, -0.6%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Nifty started the week on a strong note as it closed 0.9% higher on Monday and reclaimed its 21-DMA. It was then down in three consecutive sessions on low volume. Today, the index started on a positive note and reclaimed its 21-DMA. After a volatilite first hour, it trended up and closed above 18,100.

It was a mixed reaction on the sectoral front. Nifty IT (+2.8%) and Energy (+2.7%) were the top performers for the week. Financial-related sectors declined the most. Today, of the 2,054 stocks traded, 943 advanced, 1,030 declined, and the remaining closed flat.

Nifty reclaiming its 21-DMA is a good sign as it opens up possibilities for another upward move. The distribution day count currently stands at four. If the market succumbs to selling pressure and breaches its 50-DMA, we may change the market status to an Uptrend Under Pressure. Nifty is trading less than 1% above its 50-DMA. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.