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Nifty Ends the Week Just 1% Below its 200-DMA; Karnataka Bank Posts Good Results

July 10 2020
Weekly Action

Nifty, +1.5%; Sensex, +1.6%; Nifty Midcap, +1.4%; Nifty Smallcap, +3.5%; Model Portfolio, +1.6%.

Market Pulse Confirmed Uptrend

Weekly Market Review

Nifty continues to edge higher and is now less than 1% away from its 200-DMA. It advanced for the fourth consecutive week. Nifty’s 50- and 100-DMA merged, and its 50-DMA is about to cross its 100-DMA, which is a bullish sign. On Friday, it opened on a negative note and was volatile throughout the day. Out of Nifty50 stocks, Reliance Industries (+2.9%) was the major gainer, while Axis Bank (-3.1%) and Gail (India) (Nse) (-2.9%) dragged the index lower.

Barring Nifty Energy (-0.5%) and Media (-0.2%), all the sectoral indices closed higher. Nifty Metal (+3.6%) was the biggest gainer in the week, followed by Pvt Bank (+2.7%).

The Indian market remains in a Confirmed Uptrend. If the Nifty retakes its 200-DMA (10,880), its bullish trend might continue further. On the other side, 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. The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions.

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