Services PMI for August Came at 41.8; Nifty IT Gains, Banks Underperform

Nifty, -0.1%; Sensex, -0.2%; Nifty Midcap, +0.9%; Nifty Smallcap, +0.7%; Model Portfolio, +1.6%

Market Pulse Uptrend Under Pressure

Distribution Day Count: Four

Nifty opened with moderate gains and traded in a narrow range during the day (11,508–11,584) to close flat. Volume was comparatively higher. One distribution day expired today as 25 trading days have passed and that day of liquidation has become irrelevant. Though there was a muted action among benchmark indices, Nifty Midcap and Smallcap closed with notable gains. On the sectoral front, there was mixed action. Nifty IT, Auto, FMCG, and Pharma were leading and closed 0.8–1.5% higher. On the flip side, Nifty Bank, Financial Services, and Metals were lagging and closed 0.5–1.5% lower. Out of 2,189 stocks traded, 1,018 advanced, 807 declined, and the rest remain unchanged.

As the market condition has changed to an Uptrend Under Pressure, investors should proceed ahead with caution. Unless a stock shows exceptional fundamental and technical strength, no new addition to the portfolio is advised. Investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Looking forward, we will change the status to a Downtrend, if more distribution days are added or if Nifty breaches the 50-DMA (11,078) and the 200-DMA (10,812). On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 11,795 level (high during the recent rally).