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Nifty Makes New High on Low Volume; Metal and Realty Stocks Outperform

May 31 2021
Today’s Action
Nifty, +0.9%; Sensex, +1.0%; Nifty Midcap, +0.3%; Nifty Smallcap, +0.1%; Model Portfolio, -1.4%.
Market Pulse: Confirmed Uptrend
Distribution Day Count: Three
After opening on a flat note, Nifty turned negative and stayed lower for the first 30 minutes of the session. It then turned positive and the up move continued throughout the session. It closed the session near the day’s high. Nifty closed in the green for the seventh consecutive session. However, today’s volume was on the lower side. Of the Nifty50 stocks, 78% stocks closed in the green, led by Jsw Steel (+3.1%), Icici Bank (+3.1%) and Reliance Industries (+3.1%). Broader market indices underperformed the major index.
Reaction was mixed on the sectoral front. Nifty Metal (+2.1%) and Realty (+1.4%) were the top gainers. On the flip side, Nifty Media (-1.4%) and PSU Bank (-0.7%) were the top decliners. Advance-Decline ratio was in favor of advancers, as out of 2,306 traded stocks, 1,094 stocks advanced, 882 stocks declined, and remaining closed flat.
Nifty making a new high and not registering any distribution day after May 11 are positive signs for a sustainable rally. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.
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