Nifty Reclaims 21-DMA; Realty, Metal, and Banking Stocks Outperform

Nifty, +0.7%; Sensex, +0.8%; Nifty Midcap, +0.5%; Nifty Smallcap, +0.8%; Model Portfolio, +0.4%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Today, Nifty opened 70 points higher and continued to move higher as the day wore on. Last week, the trend during all sessions was similar. Nifty opened either flat or positive and shed its gains before the session ended. However, there was some last-hour buying on Friday. Today’s move was constructive as it closed strong and reclaimed its 21-DMA. However, it should be noted that volume was low. The broader market had mixed action.

On the sectoral front, barring Nifty IT that closed flat, all other indices closed in the green. Nifty Realty (+2.5%) was the top gainer, followed by more than 1% gain in Nifty Bank, Financial Services, and Metals. The advance-decline ratio was in favor of advancers. Out of 2,312 stocks traded, 1,320 stocks advanced, 662 stocks declined, and the remaining closed flat.

The distribution day count is currently elevated to four. If the index falls further, adds a couple of distribution days, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. 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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