Nifty, -2.9%; Sensex, -3%; Nifty Midcap, -2.5%; Nifty Smallcap, -2.6%; Model Portfolio, -2%
Market Pulse Downtrend
Nifty gapped lower this morning and remained under pressure in the first half. Selling pressure intensified in the second half, with Nifty breaching 10,800. Volume was slightly lower compared to the previous session, but higher than 50-day average volume. Pain was evenly felt in broader indices also. Nifty Midcap breached its 50-DMA. On Tuesday, we moved the market to a Downtrend as Nifty breached its 50-DMA, distribution day count remained elevated at seven, and many leading stocks failed to hold logical support levels. Today, Nifty closed just above its 200-DMA (10,767). On the sectoral front, barring Nifty FMCG (-0.9%), all the indices closed 3–4% lower. Advance-decline ratio was in favor of decliners. Out of 2,203 stocks traded, 327 advanced, 1,509 declined, and the rest remained unchanged. Tomorrow, it is crucial for Nifty to hold its 200-DMA and stage smart recovery from there.
Under this market conjuncture, investors should remain on the sidelines and avoid taking any fresh exposure. Further, investors already with positions open should trim their market exposure, and raise cash if possible. They should wait for the market to show credible signs of recovery and meanwhile, can observe the stocks that show resilience under falling market scenarios. Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (10,791) for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation.