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Nifty Edges Toward its 100-DMA; Financial Stocks Rally

June 18 2020
Today’s Action

Nifty, +2.1%; Sensex, +2.1%; Nifty Midcap, +1.3%; Nifty Smallcap, +1.5%; Model Portfolio, +1.3%

Market Pulse Confirmed Uptrend

After opening on a flat note, Nifty advanced as the session progressed. It edged closer toward its 100-DMA (10,117). For further rally, it is crucial for Nifty to retake its 100-DMA. 80% of Nifty50 stocks ended in the green, led by Bajaj Finserv (+7.8%) and Coal India (Nse) (+6.3%). Broader market indices underperformed Nifty.

On the sectoral front, barring Nifty Pharma (-0.02%), all the sectoral indices ended in the green. The advance-decline ratio was inclined toward advancers. Of 2,118 stocks traded, 1,358 advanced, 447 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. So we will be watching the action closely with an eye to control risk and identify leadership; we will wait for solid entry points develop before buying. Nifty holding 21-DMA (9,683) is important. If Nifty adds distribution days and breaches logical support levels, we may downgrade the market status to an Uptrend Under Pressure. 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.

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