At 8:00am IST, the SGX Nifty Futures was trading at 11,357, compared with Nifty’s close of 11,247 yesterday.
Market status: Rally Attempt
Global stock markets: Dow 30, +1.2%; S&P, +0.8%; Nasdaq, +0.7%; Nikkei, -0.1%; Hang Seng, +0.8%;
Yesterday, Nifty made a flat opening, remained volatile in the first half of trading session. In the second half, it traded toward the day's high of 11,295. However, in the last hour, the index witnessed selling pressure and closed with minor gains. Nifty is currently trading 0.7% below its 50-DMA. We would like the index to reclaim its 50-DMA on above average volume. In the broader market, Midcap closed flat, while Smallcap closed 0.3% lower. On the sectoral front, mixed reactions were observed. Nifty FMCG (+1.3%) advanced the most. On the flip side, Nifty Metal (-2.1%) and PSU Bank (-1.1%) were the major two decliners.
Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. (A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day). Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if the Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.
- The government has slashed domestic gas prices by 25% to $1.79/unit, the lowest level since 2014.
- Eight core industry growth dropped by 8.5% in August, mainly due to the decline in the production of steel, refinery products, and cement.
- The government will allow cinema and entertainment parks to open from October 15 with 50% seating capacity.
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, 12%; Rally Attempt, 4%; Uptrend Under Pressure, 68%; Downtrend, 16%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 4%; Rally Attempt, 4%; Uptrend Under Pressure, 60%; Downtrend, 32%.