Nifty Trims Losses to Close Flat; Metals and IT Stocks Rally

Nifty, -0.1%; Sensex, -0.2%; Nifty Midcap, +0.5%; Nifty Smallcap, +0.5%; Model Portfolio, +1.8%

Market Pulse: Confirmed Uptrend

Distribution Day Count: One

Nifty started the session on a negative note and traded in the negative zone throughout the morning session. After making a low of 17,269 in the morning session, the index started to stage a comeback in the latter half of the day. However, there was some buying and Nifty closed flat for the day. Of the Nifty50 stocks, 52% advanced, led by Coal India (Nse) (+4.0%) and Hindalco Industries (+3.2%).

There was mixed reaction on the sectoral front. Nifty Metal and IT helped the index stage a comeback with gains of 1.3% and 0.9%, respectively. On the flipside, Bank indices closed 0.4-0.6% lower. The advance-decline ratio was in favor of advancers. Of 2,058 stocks traded, 1,007 stocks advanced, 962 stocks declined, and the remaining closed flat.

The distribution day count currently stands at one. 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.

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