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IT and Financial Stocks Outperform; Bajaj Finance Surges 7.8% After Quarterly Business Update

Posted Date: July 07 2020
Today’s Action

Nifty, +0.3%; Sensex, +0.5%; Nifty Midcap,+ 0.4%; Nifty Smallcap, +1%; Model Portfolio, -0.8%

Market Pulse : Confirmed Uptrend

After a positive opening, Nifty witnessed selling pressure and fell toward the day's low of 10,690. However, it staged a reversal and closed the volatile day near 10,800, holding minor gains. Further, the index inched closer to its 200-DMA (10,885). Volume was higher than that of the previous session. In the broader market, Nifty Midcap and Smallcap closed with a gain of 0.4% and 1%, respectively.

On the sectoral front, results were mixed. Nifty IT and Nifty PVT Bank gained more than 2% each, while Nifty Bank and Nifty Financial Services advanced in the range of 1-2%. Bajaj Finance surged more than 7.5% on the Q1 FY21 business update. On the flip side, Nifty Metal (-1.7%) and Nifty Realty (-0.7%) were the top two decliners. Market breadth was inclined toward decliners. Of 2,127 stocks traded, 879 advanced, 958 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. 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. The O'Neil Methodology is a process to isolate leading stocks and buy them after a period of consolidation in order to be able to capitalize on an emerging trend. It is prudent to only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.

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