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Nifty Surges in the Last Hour; Banking Stocks Lead the Market

Posted Date: June 10 2020

Today’s Action

Nifty, +0.7%; Sensex, +0.9%; Nifty Midcap, +1.2%; Nifty Smallcap, +0.5%; Model Portfolio, +0.6%

Market Pulse: Confirmed Uptrend

Nifty opened on a positive note and was volatile throughout the session. There was no clear trend in the market. Today’s gains were mostly due to a sharp surge in the last hour. Today’s volume was slightly lower compared with yesterday's session. 56% of Nifty50 stocks have advanced, led by Indusind Bank (Nse) (+7.7%) and Hindalco Industries (+3.1%).

On the sectoral front, it was a mixed reaction. Nifty PSU Bank (+3.5%) and Pvt Bank (+2.1%) were the major advancers. On the flip side, Nifty Auto (-1.1%) and Metal (-0.6%) declined the most. The advance-decline ratio was inclined toward advancers. Of 2,126 stocks traded, 1,120 advanced, 707 declined, and the remaining traded flat.

The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions. We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength or simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. Only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.

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