Nifty Records Biggest Fall in Last 10 Months; Adds Distribution Day

Nifty, -3.0%; Sensex, -3.5%; Nifty Midcap, +0.7%; Nifty Smallcap, +0.9%; Model Portfolio, +1.5%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Five

Weekly Market Review

Nifty started the week on a negative note to breach its 21-DMA on Monday. The next three sessions saw good signs of accumulation, which helped Nifty retake its 21-DMA. However on Friday, it succumbed to massive selloff, tracking various global cues. Today’s fall is the biggest since the fall on May 4, 2020. Today’s session qualifies as a distribution day as the volume was higher compared with the previous session. However, the distribution day count remains at five as one expired today.

Nifty Metal (+7.6%) was the top gainer for the week, followed by Energy (+0.6%) and Realty (+0.5%). On the flip side, Nifty IT (-4.7%) was the major decliner, followed by Financial (-3.9%) and Auto (-3.5%). Today, the advance-decline ratio was in favor of decliners. Of the 2,234 stocks traded, 571 stocks advanced, 1,324 stocks declined, and the remaining stocks were unchanged.

We changed the market status to a Confirmed Uptrend on February 3 as Nifty retook its previous high. During the week, two distribution days expired and one was added. The distribution day count remains elevated at five. Nifty is just 0.5% above its 50-DMA. If 50-DMA is breached, we may downgrade the status to an Uptrend Under Pressure. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.