Nifty Reclaims its 50-DMA; Adani Ports to Acquire 58% Stake in Gangavaram Port

Nifty, +0.5%; Sensex, +0.6%; Nifty Midcap, +0.9%; Nifty Smallcap, +0.4%; Model Portfolio, +1.6%

Market Pulse Uptend Under Pressure

Distribution Day Count: Six

The markets were volatile throughout the day. After opening higher, Nifty continued its momentum for the initial two hours. However, in the next one hour, it erased all the initial gains to trade toward the day's low of 14,707. During the second half of the session, Nifty witnessed some buying interest and closed with decent gains. In the process, the index reclaimed its 50-DMA. Volume was higher as against the previous session.In the broader market, Nifty Midcap continued to outperform with a gain of 0.9%, while Smallcap closed 0.4% higher.

On the sectoral front, the majority of sectors were in the green. Financial stocks staged a reversal. Nifty PSU Bank, Nifty Pvt Bank, and Nifty Bank were the top gainers, closing 1.7–3.0% higher. On the flip side, Nifty Metal and Nifty FMCG were down 0.7% and 0.4%, respectively. The advance-decline ratio was in favor of advancers. Of 2,285 stocks traded, 1,115 advanced, 776 declined, and the rest remained unchanged.

Market Status Overview

- Thursday, we downgraded the market status to an Uptend Under Pressure as the distribution day count was elevated, Nifty breached its 21-DMA on last Monday, and briefly undercut its 50-DMA on Thursday. Currently, the distribution day count stands at six.

- We will change the status to a Downtrend, if one more distribution day is added or if Nifty fails to reclaim its 50-DMA and market leaders show signs of deterioration in their price actions.

Investors should consider booking profits in the stocks that have performed well and have advanced 20–25% from their ideal buy points. Even if the market undergoes a small correction, these stocks are more likely to consolidate and test their moving averages. Further, stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.