Nifty Ends the Week Below its 21-DMA; Media Index Advances 6.6%

Weekly Action

Nifty, +2.8%; Sensex, +2.7%; Nifty Midcap, +3.5%; Nifty Smallcap, +3.9%; Model Portfolio, +5.9%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

Nifty started the week on a positive note and reclaimed its 21-DMA on Wednesday. But the next two trading sessions saw pressure and the index breached its 21-DMA today. India VIX was up 9% and 5.8%, in the last two trading sessions of the week. Today, the selloff was broad based as the broader market indices underperformed the major index. Today’s session qualified as a distribution day as the volume was higher compared with the previous session. However, the distribution day count remains at three as one expired today due to aging.

On the sectoral front, barring Nifty PSU Bank (-2.2%), all the indices closed higher for the week. Nifty Media (+6.6%) was the major advancer, followed by IT (+3.8%) and Auto (+3.5%). Today, the advance-decline ratio was in favor of decliners. Of the 2,233 stocks traded, 556 stocks advanced, 1,357 stocks declined, and the remaining stocks were unchanged.

During the week, three distribution days expired due to aging and one was added today, after which the total count stands at three. The decrease in distribution day count is a good sign. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. We may downgrade the status to an Uptrend Under Pressure if Nifty falls below its 50-DMA on higher volume and the distribution day count increases.