Nifty Reclaims its 21-DMA; Barring Margin, United Spirits Q2 Results Beats Consensus On All Fronts

Nifty, +0.8%; Sensex, +0.9%; Nifty Midcap, +0.7%; Nifty Smallcap, -0.1%; Model Portfolio, +1.2%

Market Pulse Rally Attempt

Nifty remained volatile throughout the day amid the outcome of U.S. election results. After a gap-down opening, Index traded toward 11,920. In the second half, it witnessed volatility and made a day’s low of 11,756 but immediately recovered to close the trading session near the day's high holding decent gains. Volume was slightly lower compared with the last session. Nifty regained its 21-DMA and closed 0.6% above it. In the broader market, Midcap was up 0.7%, while the Smallcap index closed 0.1% lower. On the sectoral front, barring Nifty Realty, Nifty Fin Service, and Nifty Metal, all other sectors closed in the green. Nifty Pharma (+2.2%) gained the most for the day followed by Nifty IT, which advanced 1.8%. Of 2,213 stocks traded, 949 advanced, 868 declined, and the rest remained unchanged.

Looking forward, we prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. We will continue to monitor general conditions and the behavior of leading stocks, looking for evidence that a real move is commencing. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.