Nifty, +0.3%; Sensex, +0.4%; Nifty Midcap, +0.3%; Nifty Smallcap, -0.1%; Model Portfolio, -0.3%
Market Pulse Rally Attempt
Nifty opened with strong gains this morning. It continued to move higher and crossed 12,000 mark. In the second half, Nifty staged a downside reversal and dropped more than 200 points off highs. However, in the last hour, Nifty jumped off lows and recovered more than 150 points to close 0.3% higher. Volume was higher across the board. Nifty is trading 4% and 11.5% above is 50- and 200-DMA, respectively. Gains were led by Nifty Realty (+4.4%), Metal (+2.3%), and Bank (+1.4%). On the flip side, Nifty IT, FMCG, and Auto underperformed. Of 2,210 stocks traded, 927 advanced, 899 declined, and the rest remained unchanged.
Looking forward, we prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. However, we are positive on the general market as we can find further evidence of good behavior in leaders that have already broken out; for example, HDFC Bank, Reliance, Dr Reddy, Infosys, and Asian Paints. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.