Nifty Continues to Edge Higher; Broader Market Indices Close Lower

Nifty, +0.8%; Sensex, +1.0%; Nifty Midcap, -1.2%; Nifty Smallcap, -1.0%; Model Portfolio, -0.05%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Nifty had a gap up opening with a gain of 65 points. The momentum continued during the session as the index made a fresh all-time high of 16,290. Also, one distribution day expired today, decreasing the count to three, which is a good sign. However, the broader market underperformed. Nifty Midcap and Smallcap closed 1.2% and 1.0% lower, respectively.

On the sectoral front, barring financial-related indices, all closed in the red. Financial-related indices closed 0.3-2.6% higher. On the flip side, Nifty Realty (-1.7%) and Media (-1.2%) were the major decliners. The advance-decline ratio favored the decliners. Of 1,978 stocks traded, 584 stocks advanced, 1,358 stocks declined, and the remaining closed flat.

Currently, the distribution day count stands at three. Nifty is trading at an all-time high. The additional follow-through action yesterday is a good sign of further upside. But the broader market action was not very constructive. We will continue to follow the action of leaders and look for constructive behavior and potential entry points to develop. If the index adds a couple of distribution days, stages a reversal, and breaches key moving averages, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging from sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News