Nifty opened about 50 points up and advanced further to hit fresh highs of 17, 226 in the first hour of trading. However, it staged a reversal from there, turned volatile as the day progressed, and closed near the day’s low, holding minor loss. Volume was lower than in the previous session. This helped the index avoid the addition of a distribution day. In the broader market, Nifty Midcap and Smallcap advanced 0.8% and 0.3%, respectively, outperforming the major index. On the sectoral front, results were mixed. Nifty Realty(+5.6%) emerged the top gainer for the day, followed by PSU Bank (+0.9%) and Pvt Bank (+0.5%). On the flip side, Nifty Metal (-1.8%) and Nifty IT (-1.3%) were the top two decliners. The advance-decline ratio was in favor of decliners. Of 2,006 stocks traded, 915 stocks advanced, 1,016 stocks declined, and the remaining closed flat. The distribution day count now stands at two as one expired today. Further, Nifty is now trading near its all-time high and is placed above all its key moving averages. We would like the index to continue this trend. After such a sudden rally, one must also be prepared for some mild profit booking. In the process, if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.
What do you think? Please email us any questions or comments.
Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.