IT and Metal Stocks Outperform This Week; IGL Q4 Results Miss Estimates

Nifty, +1.1%; Sensex, +1.1%; Nifty Midcap, +1.5%; Nifty Smallcap, +1.2%; Model Portfolio, +0.1%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

Nifty traded in the range of 15,500–15,900 this week. It was volatile, but the range was narrow and volume was low. It closed higher in four out of five sessions. No distribution day was added during the week. Nifty breached its 21-DMA for two intraday sessions, but managed to close above it. On a weekly basis, barring Nifty Energy (-1%) and FMCG (-0.8%), all sectoral indices closed higher. Nifty Auto, Bank, Metal, and IT closed 2–3.5% higher.

Today’s gains were led by Nifty Bank, Metal, and Financial Services. Icici Bank, Axis Bank, and State Bank Of India closed 2–3% higher. On the flip side, FMCG was weak. The broader market outperformed the benchmark indices. Today, the advance-decline ratio was in favor of advancers. Of the 2,262 stocks traded, 1,051 advanced, 865 declined, and the rest remained unchanged.

Nifty is only a few points below its all-time high and has near-term support near its rising 21-DMA. We will continue to monitor the action for signs of health or crack in the market and leaders. The distribution day count currently stands at three. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend 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.