Auto Companies to Release November Sales Data Today; SGX Nifty Indicates Positive Opening

Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 12,994, compared with Nifty’s Friday close of 12,969.

Market status: Confirmed Uptrend

Distribution Day: Two

Global stock markets: Dow30, -0.9%, S&P500,-0.5%, Nasdaq,-0.1%, Nikkei, +1.5%; Kospi, +1%; Hang Seng, +0.7%

On Friday, Nifty opened on a flat note and moved sideways with the day’s range of around 120 points. 68% of Nifty50 stocks declined, led by Jsw Steel (-2.5%) and Power Grid Corp.Of India (-2.7%). Last week was a highly volatile week as Nifty traded at around 13,000. It made a fresh all-time high of 13,145 during the week and profit booking was also seen at that level. Nifty Midcap (+2.7%) and Smallcap (+3.1%) stocks clearly outperformed the benchmark index for the week. On the sectoral front, all the indices closed higher for the week. Nifty PSU Bank (+6.1%) advanced the most, followed by Metal (+5.4%) and Realty (+3.9%). Today, stocks from auto space will be in focus as most auto companies will release their November sales data today.

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

Friday, the FIIs bought equities worth Rs 7,713 crore, while the DIIs sold equities worth Rs 4,969 crore.

Hero Motocorp appointed Michael Clarke as chief operating officer.

Icici Lombard General Ins Co received in-principle approval of The Insurance Regulatory and Development Authority of India for drafting a scheme of arrangement between the company and Bharti AXA General Insurance Company.

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%.