Nifty’s Momentum Changes; Financial-Related Indices Advance

Nifty, -1.2%; Sensex, -1.7%; Nifty Midcap, -4.4%; Nifty Smallcap, -5.4%; Model Portfolio, -6.2%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Weekly Market Review

Nifty started the week on a positive note as it gapped higher on Monday. It made a new all-time high of 18,604 on Tuesday, but the momentum changed as the index closed below this level in the next four sessions. Today, after starting on a positive note, it pared gains and turned negative, making a new low for the week. As the volume is lower than yesterday’s session, we will not consider it as a distribution day.

During the week, broader market indices underperformed the general market. On the sectoral front, barring financial-related sectors, all others closed lower. Nifty FMCG (-6.1%) declined the most. Nifty Metal, Pharma, and Realty were down 5.2-5.5%.

Source: Google Images

One distribution was added and two were missed due to volume lower than the previous session. The distribution day currently stands at four. However, one distribution day is set to expire next week. The market remains in an Uptrend, but 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.