Nifty Ends the Week Below 13,000; Midcap and Smallcap Stocks Outperform

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Weekly Market Review

It was a highly volatile week as Nifty traded around 13,000. It made a fresh all-time high of 13,145 during the week and profit booking was also seen at that level. Today, Nifty opened on a flat note and moved sideways with the day’s range of around 120 points. 68% of Nifty50 stocks declined today, led by Jsw Steel (-2.5%) and Power Grid Corp.Of India (-2.7%). Nifty Midcap (+2.7%) and Smallcap (+3.1%) stocks clearly outperformed the benchmark index.

On the sectoral front, all the indices closed higher for the week. Nifty PSU Bank (+6.1%) advanced the most followed by Metal (+5.4%) and Realty (+3.9%). Today, the market breadth was in favor of advancers. Of 2,013 stocks traded, 1,209 advanced, 684 declined, and the rest remained unchanged.

Though we are in a Confirmed Uptrend, we need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~20% above its 200-DMA, which is rare. We expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.