SGX Nifty Indicates Positive Opening; Reliance Receives CCI Approval for the Future Retail–Reliance Retail Deal

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 12,963, compared with Nifty’s Friday close of 12,859.

Market status: Confirmed Uptrend

Distribution Day: One

Global stock markets: Dow 30, -0.8%; S&P, -0.7%; Nasdaq, -0.7%; Nikkei, -0.4%; Kospi, +1.7%; Hang Seng, -0.1%

Last week, the market continued its positive momentum. Nifty edged higher and made a fresh all-time high of 12,963 during the week. However, it staged a downside reversal on Thursday and added a distribution day. On Friday, it recouped some of its Thursday’s losses as banking and financial stocks led the gains. Currently, Nifty is trading 8.4% and 20.0% above its 50- and 200-DMA, respectively. The momentum in the market was broad based. A reasonable amount of quality stocks are breaking out of their early stage consolidation bases. On the sectoral front, Nifty Auto (+4.5%) was the top gainer. Nifty Bank, Financial Services, Metal, and Realty were up 2.5–4.0%. Nifty FMCG closed 0.7% higher, while IT closed flat. On the flip side, Nifty Pharma (-1.5%) was the laggard.

We are in a Confirmed Uptrend but need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~20% above its 200-DMA, which is rare. We might expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. An accumulation of distribution days can halt the uptrend.

Key News

HFCL’s promoter entity MN Ventures has acquired an additional 5 lakh equity shares in the company via open market transaction.

Reliance Industries received approval from the Competition Commission of India for the Future Retail & Reliance Retail deal.

Indian Railway Catering And Tourism Corp said that the government has appointed Crawford Bayley & Co. as its legal advisor for the disinvestment of paid-up equity capital through an offer for sale.

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, 72%; Rally Attempt, 8%; Uptrend Under Pressure, 20%; Downtrend, 0%.

For the 24 developed 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%.