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Auto and IT Stocks Push Nifty Higher; Ultratech Q1 Results Beat Estimates on All Fronts

July 28 2020
oday’s Action

Nifty, +1.5%; Sensex, +1.5%; Nifty Midcap, +0.9%; Nifty Smallcap, +1.4%; Model Portfolio, +0.4%

Market Pulse Confirmed Uptrend

Today, Nifty opened higher and managed to hold gains in the first half. In the last four sessions, Nifty traded in a tight range of 11,056–11,240. Nifty found resistance near 11,240 in today’s session as well. However, in the second half, strong upward momentum in cement, auto, and IT stocks helped Nifty to breakout from brief consolidation and close 1.5% higher. As the volume was higher than yesterday’s session, we will consider today's move as an additional follow-through day. It can be observed on Nifty’s chart that since June, it is trading above its upward trending 21-DMA line and regularly going through brief consolidation and then advances 4–5%. This is a very constructive set up.

On the sectoral front, barring Nifty Media (-0.2%), all the sectors closed in the green. Nifty Auto, Metal, and IT closed 2–3% higher. Nifty Bank, Realty, and Financial Services closed 1–1.5% higher. Market breadth was inclined toward advancers. Of 2,164 stocks traded, 955 advanced, 872 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We are operating in an uncertain environment where information is distributed unevenly, and it is an environment where outside forces, either intentionally or unintentionally, affect prices across various time frames. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying.

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