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Nifty Retakes its 100-DMA; Financial Stocks Surge

April 22 2021
Today’s Action

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

Market Pulse: Downtrend

Nifty started the session on a negative note and made an intraday low of 14,151 within the first minute. But as the session progressed, it turned into positive territory on strong buying and continued to edge higher with volatility. On the downside, it breached Monday’s low, so the correction low is reset to today’s low of 14,151. However, as Nifty closed in the upper half, today’s session will be considered as Day 1 of an attempted rally.

On the sectoral front, there was mixed action. Financial-related sectors were the top gainers. On the flip side, Nifty FMCG, Pharma, and IT closed 0.2–0.7% lower. The advance-decline ratio was in favor of advancers. Of the 2,250 stocks traded, 1,126 advanced, 745 declined, and the rest remained unchanged.

On Monday, we had changed the market status to a Downtrend from a Rally Attempt as Nifty breached its previous correction low (14,248). Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (14,151) for two more sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing best relative strength with good accumulation.

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