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Markets Continue to March Higher; Page Industries Q4 Results Miss Estimates on all Fronts

June 23 2020
Today’s Action

Nifty, +1.6%; Sensex, +1.5%; Nifty Midcap, +1.5%; Nifty Smallcap, +1.6%; Model Portfolio, +2.4%

Market Pulse Confirmed Uptrend

After a gap-up opening, Nifty moved sideways in the first half of the day. However, in the second half, it rallied sharply to close at the highs of the day. Broader market indices continue to outperform. A broad-based rally is positive for the market. On the sectoral front, all sectoral indices closed in the green. Nifty PSU Bank continues to lead. It closed 3.4% higher. Nifty Bank, Realty, and Financial Services closed 2–3% higher, while Nifty Metal, Pharma, and IT gained 1–2%. The advance-decline ratio was skewed toward advancers. Of 2,120 stocks traded, 1,323 advanced, 504 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. So we will be watching the action closely with an eye to control risk and identify leadership; we will wait for solid entry points develop 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.

There are a lot of discussions on how and why markets are rallying when the economy is not in good shape and many countries worldwide face health challenges. It is important to recall and understand the words of William O’Neil in this situation. William O'Neil has always said, "You don't have to know what will happen to make money in the market, you only need to know what is happening right now, and perhaps over the last weeks."

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