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Nifty Escapes Distribution Day; FMCG Stocks Shine While Realty and PSU Bank Stocks Underperform

June 29 2020
Today’s Action

Nifty, -0.7%; Sensex, -0.6%; Nifty Midcap, -1.6%; Nifty Smallcap, -1.4%; Model Portfolio, -0.4%

Market Pulse Confirmed Uptrend

Nifty had a gap-down opening this morning taking cues from global markets. However, the dip was bought and the index rebounded more than 85 points from the day's low (10,223) and closed in the upper half of the day's range. Though the loss was more than 0.2%, Nifty escaped a distribution day as volume was lower compared with Friday's session.

On the sectoral front, barring Nifty FMCG (+0.7%), all other sectoral indices closed in the red. Nifty Realty (-3.6%) declined the most followed by Nifty PSU Bank which was down more than 3%. Market breadth was inclined toward decliners. Of 2,125 stocks traded, 695 advanced, 1,156 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. So, we will be watching the action closely with an eye to control risk and identify leadership; we will wait for solid entry points before buying. The O'Neil Methodology is a process to isolate leading stocks and buy them after a period of consolidation in order to be able to capitalize on an emerging trend. 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.

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