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Nifty Ends Week on a Positive Note; HCL Tech Net Profit Increases 18.5% y/y

October 17 2020
Weekly Action

Nifty, -1.3%; Sensex, -1.3%; Nifty Midcap, -1.8%; Nifty Smallcap, -0.6%; Model Portfolio, -1.2%.

Market Pulse Rally Attempt

Weekly Market Review

Continuing the positive momentum from last week, Nifty started the week on a positive note and advanced for the first three consecutive sessions. On Monday, it touched 12,000 for the first time since March. Thursday, index faced resistance around 12,000 and succumbed to selling pressure and lost almost 300 points. On Friday, the index traded in a slightly narrow range. It advanced 80 points and closed near the day’s high.

Barring Nifty Metal (+3.1%), all the sectoral indices closed lower. Nifty Media (-6.8%) declined the most, followed by Nifty PSU Bank (-4.7%) and Auto (-2.5%). Today, the advance-decline ratio was skewed toward advancers. Of 2,205 stocks traded, 1,160 advanced, 675 declined, and the rest remained unchanged.

Looking forward, we would 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. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.


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