Nifty, -1.7%; Sensex, -1.5%; Nifty Midcap, +1.3%; Nifty Smallcap, -0.7%; Model Portfolio, -0.7%.
Market Pulse Confirmed Uptrend
After two consecutive weeks of gains, Nifty turned volatile during the week. In two trading sessions, Nifty tested its 100-DMA but failed to close above it. Thursday’s action qualified as a distribution day. Today, Nifty had around 350-point gap down taking cues from global markets. However, as the day progressed, markets recovered fully and closed in the green.
On the sectoral front, barring Nifty Realty (+0.9%) all the indices closed lower for the week. Nifty Media (-7.3%) was the biggest decliner followed by Metal (-4.1%). Financial related sectors declined around 2–3%.
Although we are in a Confirmed Uptrend, our approach turned cautious toward the market. We are ready to book smaller than usual profits if any selling pressure is observed. If we see Nifty add more distribution days, breaching key moving averages, and begin to see leaders falter at support, we will likely shift the market status to an Uptrend Under Pressure. The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions.
We do our best to narrow our focus on stocks that meet our leadership profile. This indicates they are showing strong earnings and sales, and also have an interesting potential catalyst – a new product, a new mode of operation, or new management. Once we have identified these companies, it is a matter of buying them after a period of consolidation along with conviction in demand for their shares.