Nifty, +0.9%; Sensex, +0.9%; Nifty Midcap, +1.2%; Nifty Smallcap, +1%; Model Portfolio, +0.8%
Market Pulse Confirmed Uptrend
Distribution Day Count: Three
Nifty made a gap up opening today and traded sideways in the first half of the trading session. Toward the end of the session, the index witnessed follow-up buying interest, which helped the index hit a fresh high and close the day with significant gains. Volume was lower than the previous session. In fact, the volume has been decreasing consistently for the third trading session, which can be a sign of caution. In the broader market, midcap and smallcap outperform the major indices with a gain of 1.2% and 1%, respectively.
On the sectoral front, barring Nifty PSU bank, all other sectors closed in the green. Nifty Realty (+5.1%) advanced the most, followed by Nifty Metal and Auto, which gained 1.8% and 1%, respectively. Further, Nifty IT, Fin Service, and FMCG were up in the range of 0.7–0.9%. Market breadth was skewed toward advancers. Of 2,233 stocks traded, 1,144 stocks advanced, 746 declined, and the remaining stocks remained 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. After a strong rally, pullback/consolidation (if any) is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.