Nifty Retakes its 50-DMA; Nifty Metal Advances 8.7% for the Week

Nifty, +2.5%; Sensex, +2.1%; Nifty Midcap, +4.2%; Nifty Smallcap, +3.8%; Model Portfolio, +4%.

Market Pulse Uptrend Under Pressure

Distribution Day Count: Six

Weekly Market Review

Nifty started the week with a gap-up opening on Tuesday and retook its 50-DMA, which it had breached last week. However, profit booking was observed on Wednesday. Today, being a weekly expiry, the session was highly volatile. It started the session with over 100 points higher but gains were erased quickly in the first quartile of the trading session. However, as the session progressed, upside reversal was observed and Nifty retook its 50-DMA. Daily trading volume stayed below the average volume through the week. Today, advance-decline ratio was in favor of advancers. Out of 2,256 stocks, 1,565 advanced, 352 declined, and the rest remained unchanged.

All the sectoral indices closed in the green on a weekly basis. Nifty Metal (+8.7%) advanced the most, followed by PSU Bank (+4.7%) and Pharma (+4.2%). Remaining indices gained around 1.2–3.2%.

Market Status Overview

• The index is currently hovering around its key moving averages. From here, we would like the index to firmly trade above its key moving averages. On the flip side, we will change the status to a Downtrend, if one more distribution day is added or if Nifty makes a decisive breach of its key moving averages and if market leaders show signs of deterioration in their price actions.
• Under current market conjecture, since we are in an Uptrend Under Pressure with distribution day count on the higher side, investors should consider booking profits in 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.