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Nifty Closes Above 12,100; Godrej Consumer Q2 Results Beats Consensus On All Fronts

November 05 2020
Today’s Action

Nifty, +1.8%; Sensex, +1.8%; Nifty Midcap, +1.8%; Nifty Smallcap, +1.7%; Model Portfolio, +1.6%

Market Pulse Rally Attempt

Nifty made a gap-up opening above 12,000, taking cues from global markets. It was able to hold the opening gains throughout the day and traded constructively to close near the day's high posting solid returns. Though index advanced more than 1.5% for the day, today’s session did not qualify as a follow-through day as volume was lower than the previous day. Nifty is currently placed about 2.5% below its 52-week high. In the broader market, both Midcap and Smallcap performed in sync with the general market and closed 1.8% and 1.7% higher, respectively.

On the sectoral front, barring Nifty Realty, all other sectors closed in the green. Nifty Media and Metal advanced more than 4%. Nifty Bank, Fin Service, FMCG, Pvt Bank, and PSU bank advanced 1.5–3.0%. Market breadth witnessed significant improvement. Of 2,211 stocks traded, 1,347 advanced, 491 declined, and the rest remained unchanged.

Looking forward, we prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. We will continue to monitor general conditions and the behavior of leading stocks, looking for evidence that a real move is commencing. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.

 

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