Nifty, +1.1%; Sensex, +1.2%; Nifty Midcap, +1%; Nifty Smallcap, +0.9%; Model Portfolio, +0.3%
Market Pulse Confirmed Uptrend
Distribution Day Count: Two
Nifty gapped higher this morning and continued positive momentum throughout the day. It made a high of 13,128 but was not able to move above ATH of 13,145. Nifty is trading 3.75% and 8.8% above its 21-and 50-DMA, respectively. The broader market also continued to move higher. Though Nifty is at a fresh high, Nifty Midcap100 and Smallcap100 are 10% and 35%, respectively, below their all-time highs. On the sectoral front, Nifty Realty (+3.3%) advanced the most, followed by PSU Bank (+2.9%). Nifty IT, Metal, and Pharma closed 1.7–1.9% higher. Market breadth was in favor of advancers. Of 2,230 stocks traded, 1,254 advanced, 640 declined, and the rest remained unchanged.
Though we are in a Confirmed Uptrend, we need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~22% above its 200-DMA, which is rare. We expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.