Nifty, -0.9%; Sensex, -1.1%; Nifty Midcap, -0.9%; Nifty Smallcap, -1.2%; Model Portfolio, -0.9%
Market Pulse Confirmed Uptrend
Distribution Day Count: Five
Nifty gapped higher this morning and tried to reclaim 14,500. However, it staged a downside reversal and dropped 200 points. The volatility was high as Nifty moved 150 points higher from day’s low in the second hour. It slipped again and closed below its 21-DMA for the first time after three months. As the volume in Nifty was lower compared with yesterday’s session, we will not mark today’s session as a distribution day. The count is now elevated to five, with one distribution day set to expire on Wednesday.
On the sectoral front, Nifty Pharma gained 1.8%. Nifty Bank, Financial Services, and Metal closed flat. On the flip side, Nifty IT, Auto, and Realty closed 0.5–1.5% lower. Market breadth was skewed toward decliners. Of 2,211 stocks traded, 519 advanced, 1,404 declined, and the remaining were unchanged.
The distribution day count is at five (one expires on Wednesday) and many stocks have breached their 21- and/or 50-DMA. Also, Nifty has breached its 21-DMA. If distribution day count increases, we may downgrade the market status to an Uptrend Under Pressure. We will continue to monitor the market and look for signs of strength or weakness. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and/or showing technical weakness.