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Nifty Finds Support at its 50-DMA; SREI Infra Zooms 20%

April 09 2021
Weekly Action
Nifty, -0.2%; Sensex, -0.9%; Nifty Midcap, +1.4%; Nifty Smallcap, +3.3%; Model Portfolio, +3.8%.
Market Pulse Uptend Under Pressure
Distribution Day Count: Six
Weekly Market Review
Nifty was trading close to its 50-DMA throughout the week. It breached its 50-DMA on Monday and retook on Wednesday. Today’s session was rangebound compared with previous sessions, but the index closed above its 50-DMA after breaching it intraday. Trading volume continued to be below average for the current week as well. Advance-decline ratio was in favor of advancers. Out of 2,256 stocks, 1,097 advanced, 786 declined, and the rest remained unchanged.
On a weekly basis, sectoral reaction was mixed. Nifty Metal (+6.6%) advanced the most, followed by IT (+5.3%) and Pharma (+5.0%). Financial indices declined the most.
Market Status Overview
- The index is currently hovering around its key moving averages. From here, we would like the index to firmly trade above its key moving averages. On the flip side, we will change the status to a [Downtrend], if one more distribution day is added or if Nifty makes a decisive breach of its key moving averages and if market leaders show signs of deterioration in their price actions.
- Under current market conjecture, since we are in an Uptrend Under Pressure with distribution day count on the higher side, investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Even if the market undergoes a small correction, these stocks are more likely to consolidate and test their moving averages. Further, stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price.

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