Nifty Closes Above 10,550; Auto and IT Stocks Outperform

Nifty, +1.2%; Sensex, +1.2%; Nifty Midcap,+ 1.3%; Nifty Smallcap, +1.1%; Model Portfolio, 0.0%

Market Pulse Confirmed Uptrend

After a gap-up opening, Nifty kept the positive momentum intact and formed higher highs in the hourly chart to trade toward the day's high of 10,599. However, it witnessed minor profit booking in the last hour and closed near 10,550. Volume was slightly higher than the previous session. In the broader market, Nifty Midcap and Smallcap closed with a gain of 1.3% and 1.1%, respectively.

On the sectoral front, results were mixed. Nifty Auto (+2.8%) gained the most followed by Nifty IT which was up more than 2.5%. On the flip side, Nifty Bank, Nifty PSU Bank, and Nifty Realty closed in the red with a decline of 0.1% each. Market breadth was inclined toward advancers. Of 2,122 stocks traded, 1,090 advanced, 720 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points 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.