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Nifty Registers Longest Winning Streak in Two Years; IT Stocks Support Market

Posted Date: October 12 2020
Today’s Action

Nifty, +0.1%; Sensex, +0.2%; Nifty Midcap, -0.6%; Nifty Smallcap, -0.4%; Model Portfolio, +0.3%

Market Pulse Rally Attempt

Nifty continued its positive momentum as it gapped up for yet another session. However, today’s session was volatile as it made day’s high of 12,022 within the first 10 minutes and selling gripped as Nifty lost over 150 points from day’s high. Nifty managed to close in the green and it was the eighth consecutive session of advancement. Thus, it registered its longest winning streak since April 2018. 52% of Nifty50 stocks advanced today, led by Infosys (+2.3%) and Itc (+2.6%). On the flip side, Bharti Airtel (-2.4%) and Jsw Steel (-2.4%) were the major decliners.

On the sectoral front, the majority of sectoral indices declined. Nifty Media (-2.4%) declined the most, followed by Nifty PSU Bank (-1.7%) and Realty (-1.1%). On the other side, Nifty IT (+1.7%) and Pharma (+0.9%) advanced the most. The advance-decline ratio was in favor of decliners. Of 2,220 stocks traded, 1,204 declined, 662 advanced, 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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