Nifty, -0.6%; Sensex, -0.7%; Nifty Midcap, +0.8%; Nifty Smallcap, +1.1%; Model Portfolio, +1.8%.
Market Pulse: Confirmed Uptrend
Distribution Day Count: Four
Weekly Market Review
Nifty was down for four trading sessions this week. The index has been trading along its 21-DMA for the last few weeks. This week, it tested its 50-DMA and found support around the level. Today, the index opened on a flat note and moved sideways in the first half of the session. In the second half, the index was highly volatile as it moved higher and then gave up all gains to close lower.
During the week, Nifty Metal (+7.8%) was the major gainer followed by Media (+2.4%) and IT (+1.9%). Nifty Energy (-2.9%) was the major decliner. Nifty Auto, Bank, FMCG, Pharma and Pvt Bank declined 1.2-1.7%. Today, the advance-decline ratio was in favor of advancers. Of the 2,265 stocks traded, 1,058 advanced, 859 declined, and the rest remained unchanged.
Nifty has been hovering around its 21-DMA for the last two months. It is crucial for the index to hold and trade above this level. Two distribution days were added during the week, increasing the count to four. On the flip side, if the index falls further and adds a couple of distribution days, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.