Nifty, +0.2%; Sensex, +0.2%; Nifty Midcap, +0.5%; Nifty Smallcap, +1%; Model Portfolio, +0.8%
Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
Nifty after a muted opening, gained strength and moved above 15,350. The volatility was high due to monthly F&O expiry. After moving to and fro, Nifty closed 0.2% higher. Volume was comparatively high. Nifty is now less than 100 points below its all-time high. Broader market indices outperformed benchmark indices. Barring Nifty Realty (-1.2%) and Pharma (-0.2%), all other sectoral indices closed in the green. Nifty PSU Bank closed 2.8% higher. Nifty IT (1.2%) continues positive momentum after leading stocks like TCS and Infosys reclaimed its 50-DMA yesterday. The advance-decline ratio was in favor of advancers. Of the 2,259 stocks traded, 1,024 advanced, 893 declined, and the rest remained unchanged. Nifty is trading 3% and 4% above its 21- and 50-DMA, respectively.
Last week, Nifty registered an additional follow-through day and hasn’t added any distribution day after May 11. These are positive signs for a sustainable rally. We would like the index to hold its 50-DMA and trade above that. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.