Today’s Action Qualifies as Distribution Day; All Sectoral Indices Close in the Red

Nifty, -0.7%; Sensex, -0.6%; Nifty Midcap, -0.7%; Nifty Smallcap, -1.3%; Model Portfolio, -0.9%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Nifty started the session flat and trended higher in the first half. It hit a fresh all-time high of 15,800, after which it moved down over 230 points to make an intraday low of 15,566. Of the Nifty50 stocks, 78% declined, among which Tata Motors (-2.7%) and  Adani Ports and Special Economic Zone (-2.5%) were the major decliners.

Today’s fall was more than 0.2% and volume was higher than in the previous session. Hence, it qualifies as a distribution day. However, the distribution day count remains unchanged as one expired today.

All the sectoral indices closed in the red. Nifty Media (-2.1%) declined the most, followed by Realty (-1.7%) and PSU Bank (-1.4%). The advance-decline ratio was in favor of decliners, as out of 2,258 stocks traded, 713 stocks declined, 1,217 stocks declined, and the remaining closed flat.

Nifty succumbed to a distribution day for the first time since May 11. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

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