Nifty, -1.1%; Sensex, -1.2%; Nifty Midcap, -1.4%; Nifty Smallcap, -1.3%; Model Portfolio, -1.5%
Market Pulse Uptend Under Pressure
Distribution Day Count : Six
Nifty started the session on a positive note following global cues. In the opening hour, Nifty was down more than 100 points from its high. After moving sideways, selling pressure intensified in the second half and Nifty breached its 50-DMA. However, Nifty managed to close around 80 points off lows but with a loss of 1%. Selling pressure continued to remain higher on the broader market. Today’s session qualified as a distribution day as the volume was higher compared with the previous session.
On the sectoral front, barring almost flat closing for Nifty Auto, FMCG, and Metal, all other indices closed in the red. Nifty IT and Pharma were the top losers, closing 2–3% lower. The advance-decline ratio was in favor of decliners. Of 2,238 stocks traded, 444 advanced, 1,462 declined, and the rest remained unchanged.
Market Status Overview
- Yesterday, we downgraded the market status to an Uptend Under Pressure as distribution day counts were elevated, Nifty breached its 21-DMA on Monday, and briefly undercutting its 50-DMA yesterday. Currently, the distribution day count stands at six.
- We will change the status to a [Downtrend], if one more distribution day is added or if Nifty fails to reclaim its 50-DMA and market leaders show signs of deterioration in their price actions.
Investors should consider booking profits in the stocks that have performed well and have advanced 20–25% from their ideal buy points. Even if the market undergoes a small correction, these stocks are more likely to consolidate and test their moving averages. Further, stocks slipping below their 50- and 200-DMA on above-average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.