Market Pulse: Confirmed Uptrend
Nifty50: Three Nifty Midcap100: Three Nifty Smallcap100: Two
Global stock markets: Dow 30, +1.4%; Nasdaq, +1.2%; S&P 500, +0.8%; Nikkei, -0.7%; Kospi, -1.6%; Shanghai Composite, +0.9%.
On Friday, Nifty gapped down nearly 90 points and remained volatile throughout the day. Though the index closed more than 0.2%, the volume was lower than in the previous session. This helped the index escape an additional distribution day. On a weekly basis, Nifty had a run of profit booking and corrected toward its 21-DMA during the week. Barring Monday, the index closed in the red in all trading sessions.
On the sectoral front, Nifty PSU Bank (+6.1%) staged a reversal and emerged as the top gainer for the week. Similarly, Nifty Energy gained 5.9% for the day, followed by Nifty Metal and Nifty Pharma, which were up 2.6% and 2.1%, respectively. On the flip side, Nifty IT (-6.3%), Nifty Financial (-2.6%), and Nifty Pvt Bank (-2.5%) were the top decliners for the week.
Nifty closed near its 21-DMA (17,530) in the week. We would like the index to stage a reversal from there and initiate the next leg of the rally. On the flip side, the distribution day count rose to three this week. 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.