At 8:00 am IST, the SGX Nifty Futures was trading at 10,470, compared with Nifty’s close of 10,471 yesterday.
Market status: Confirmed Uptrend
Global stock markets: Dow 30, +0.5%; S&P 500, +0.4%; Nasdaq, +0.7%; KOSPI, +1.4%; Nikkei, +0.1%; Hang Seng, -0.1%; Shanghai Composite, +0.3%.
After a gap-up opening yesterday, Nifty moved sideways in the first half of the day. However, in the second half, it rallied sharply to close at the highs of the day. The broader market indices continue to outperform. A broad-based rally is positive for the market.
On the sectoral front, all sectoral indices closed in the green. Nifty PSU Bank continues to lead. It closed 3.4% higher. Nifty Bank, Realty, and Financial Services closed 2–3% higher, while Nifty Metal, Pharma, and IT gained 1–2%. The advance-decline ratio was skewed toward advancers. Of 2,120 stocks traded, 1,323 advanced, 504 declined, and the remaining traded flat.
It is crucial for the Nifty to not breach its 100-DMA for the rally to continue. On the other hand, if we see Nifty add more distribution days, breaching key moving averages, and begin to see leaders falter at support, we will likely shift the market status to an Uptrend Under Pressure.
The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions. We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength or simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. Only invest in stocks that have strong fundamentals (i.e., good sales, earnings, and margins, among others) and that are breaking out of sound base structures on heavy volume.
Indian Bank reported its Q4 FY20 results yesterday after market hours. Net interest income grew 13.6% y/y to Rs 2,002.7 crore. Its loss widened to Rs 217.7 crore compared with a loss of Rs 190 crore in the corresponding quarter last year.
Asian Paints announced its Q4 FY20 results yesterday after market hours. Revenue from operations declined 7.1% y/y to Rs 4,635 crore. PAT after non-controlling interest decreased 2.1% to Rs 461 crore.
O’Neil Market Condition Report
For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%;Downtrend, 0%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 46%; Rally Attempt, 0%; Uptrend Under Pressure, 54%; Downtrend, 0%.