Nifty Hits 14,000 During the Week, Broader Market Outperforms; Auto, Metal, and Realty Stocks Lead the Gain

Weekly Action

Nifty, +2%; Sensex, +1.9%; Nifty Midcap, +3%; Nifty Smallcap, +3.9%; Model Portfolio, +3.3%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Weekly Market Review

Nifty made higher highs in the daily chart and hit 14,000 in the last week of 2020. The index started the week on a positive note and remained bullish for three consecutive days. However, on Thursday, the index was volatile amid monthly/weekly expiry and closed flat. Today, Nifty opened about 15 points higher than the previous close. Though the index remained volatile through the day, it traded in a narrow range and closed with minor gains. Further, one distribution day expired today, taking the count to two. On the broader market, Nifty Midcap and smallcap closed 3% and 3.9% higher, respectively.

On the sectoral front, all the sectors closed in the green. Nifty PSU bank staged a reversal with a gain of 6.2%. Further, Nifty Realty (+5.7%) gained the most followed by Nifty Metal and Nifty Auto, which advanced 3.6% and 3.3%, respectively. Today, the advance-decline ratio was inclined toward the advancers. Of the 2,231 stocks traded, 1,294 advanced, 576 declined, and the remaining were unchanged.

With leadership broadening and indices above relevant intermediate-term moving averages, we will continue to look for leadership-quality growth names to form entry points. If a pullback/consolidation happens, it will be crucial for Nifty to hold its 21-DMA. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and showing technical weakness. Also, tracking distribution days is crucial as a rise in distribution days can halt the uptrend.