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Nifty Snaps Winning Streak but Escapes Distribution Day; IT and Auto Stocks Underperform

Posted Date: July 22 2020
Today’s Action

Nifty, -0.3%; Sensex, -0.2%; Nifty Midcap, +0.1%; Nifty Smallcap, 0.0%; Model Portfolio, +0.2%

Market Pulse Confirmed Uptrend

Nifty opened in positive territory for the sixth consecutive session. However, as the day progressed, selling pressure increased, and Nifty slipped into negative territory. The loss was more than our threshold to consider a distribution day, however, volume was modestly lower compared to yesterday’s session. So, it will not be considered a distribution day. 65% of the Nifty50 stocks closed lower. TATAMOTORS and HUL closed more than 3% lower. On the flip side, Axis Bank (+7.3%) and Titan Industries (Nse) (+4.2%) outperformed.

On the sectoral front, Nifty Auto, IT, and Realty closed more than a percent lower. While Nifty Bank, Media, and Pharma closed 0.2–0.5% higher. Market breadth was inclined toward decliners. Of 2,156 stocks traded, 802 advanced, 1,032 declined, and the remaining traded flat. Nifty is trading 10.3% and 2.5% above its 50- and 200-DMA, respectively.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We are operating in an uncertain environment where information is distributed unevenly, and it is an environment where outside forces, either intentionally or unintentionally, affect prices across various time frames. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying.

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