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Nifty Faces Resistance at 12,000 During the Week; IDBI Bank Reports Good Set of Numbers

October 23 2020

Weekly Action

Nifty, +1.4%; Sensex, +1.8%; Nifty Midcap, +3.1%; Nifty Smallcap, +2.7%; Model Portfolio, +0.8%.

Market Pulse Rally Attempt

Weekly Market Review

Nifty started the week on a strong note as it gapped up on Monday morning. It continued to stay on a positive course. Barring Thursday, it closed in the green in all the sessions. Again it faced resistance around 12,000 level. It is crucial for Nifty to close above 12,000. Today, the action was muted as it traded in a narrow range of around 60 points.

Barring Nifty Pharma (-2.6%) and IT (-0.1%), all the sectoral indices closed higher. Nifty Realty (+9.3%) advanced the most, followed by Nifty Metal (+4.9%) and Bank (+4.1%). Today, the advance-decline ratio was skewed toward advancers. Of 2,218 stocks traded, 1,219 advanced, 645 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.

What do you think? Please email us any questions or comments.

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