September Series Ends with Volatility; Broader Markets Continue to Outperform

Nifty, -0.5%; Sensex, -0.5%; Nifty Midcap, +0.4%; Nifty Smallcap, +0.8%; Model Portfolio, +0.8%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Nifty started the session on a flat note and traded sideways in the first half. Today being a monthly expiry day, volatility gripped markets in the second half. Nifty fell sharply by around 150 points and closed near the day’s low. However, the fall is over 0.2%. Nifty escaped distribution as volume was lower than in yesterday’s session.

Sectoral action was mixed, with the majority ending in the red. Nifty Realty (+1.5%), gained the most, followed by PSU Bank (+0.8%) and Pharma (0.4%). The remaining sectors declined 0.1-0.9%. The advance-decline ratio was in favor of advancers. Of 2,046 stocks traded, 1,026 stocks advanced, 934 stocks declined, and the remaining closed flat.

The distribution day count currently stands at three. Further, Nifty is trading above all its key moving averages. We would like the index to continue to trade above its key moving averages. After such a sudden rally, one must also be prepared for some mild pullback and 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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