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Nifty Breaches 50-DMA; Banking Stocks Fall Sharply

April 30 2021
Weekly Action
Nifty, +2%; Sensex, +1.9%; Nifty Midcap, +3%; Nifty Smallcap, +3.8%; Model Portfolio, +2.8%.
Market Pulse: Confirmed Uptrend
 
Distribution Day Count: One
 
Weekly Market Review
 
Nifty gapped higher on Monday morning as Banks were in momentum after ICICI Bank released good Q4 FY21 results. On Monday, we shifted the market to a Rally Attempt as the index managed to stay above its recent low (14,151) for three consecutive sessions. On Tuesday, Nifty reclaimed its 21-DMA. On Wednesday, it reclaimed its 50-DMA and staged a follow-through day. So, we upgraded market status to a Confirmed Uptrend. Today, Nifty was under selling pressure and breached its 50-DMA. Also, as the fall was on high volume compared to yesterday’s session, we will consider it a distribution day.
 
On the sectoral front, for this week, Nifty Metal (+9%) was the top gainer, followed by Nifty Bank (+3.3%). Nifty Financial Services, Energy, Media, and Realty closed 2–2.5% higher. Nifty IT closed flat, while FMCG closed 0.3% lower. Today, the advance-decline ratio was in favor of decliners. Of the 2,252 stocks traded, 822 advanced, 1,048 declined, and the rest remained unchanged.
 
Looking ahead, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. Stocks that are breaking out of consolidation have higher relative strength, and superior fundamentals can do well. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

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