Nifty Continues to Make Higher Highs; Metal and PSU Bank Stocks Outperform

Nifty, +0.8%; Sensex, +0.8%; Nifty Midcap, +1.2%; Nifty Smallcap, +0.7%; Model Portfolio, +2%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Nifty’s gap up story continued in today’s session with the index crossing 18,500. It continued to consolidate throughout the day, making a high of 18,543 and traded in a narrow range of ~100 points. The benchmark index closed in the top quartile of the day’s range. Base metals surged as European smelters became the latest casualties in the global energy crisis that’s knocking supply offline and mounting pressure on manufacturers. Non-ferrous stocks rallied strongly today with National Aluminium (Nse) and Hindustan Copper (Nse) gaining 13.1% and 12.7%, respectively.

Source : me.me

Along with the benchmark index, Nifty Midcap and Smallcap remained strong throughout the day. Of 2,096 stocks traded, 1,035 stocks advanced, 995 declined, and the remaining closed flat. On the sectoral front, Nifty Metal, PSU Bank, and IT showed strong momentum and advanced 3.9%, 3.9%, and 1.6% respectively. On the other hand, Nifty Media and Pharma remained weak and declined 0.7% and 0.9%, respectively.

The distribution day count currently stands at three. Further, Nifty is trading at new highs, above all its key moving averages. We would like the index to continue trading above its key moving averages. We maintain a positive view on the market, but if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.