Nifty Retakes its 21-DMA; India’s February Composite PMI Increased to 57.3

Nifty, +2.2%; Sensex, +2.3%; Nifty Midcap, +1.7%; Nifty Smallcap, +1.0%; Model Portfolio, +1.2%

Market Pulse Confirmed Uptrend

Distribution Day Count: Three

It was a unidirectional trading session as the market continued its positive momentum for the third consecutive session. Nifty retook its 21-DMA and is just 200 points (1.2%) below its all-time high of 15,431. Volume was lower than the previous session. In the broader market, both midcap and smallcap underperformed to close with a gain of 1.7% and 1.0%, respectively.

Barring Nifty Auto (-0.7%), all the sectoral indices closed in the green. Nifty Metal (+3.3%) advanced the most followed by Nifty PSU Bank (+3.2%). Advance-decline ratio was skewed toward advancers. Out of 2,238 stocks, 1,195 advanced, 685 declined, and the remaining were unchanged.

Today, one distribution day (27/1/2021) expired due to aging, after which the total count decreased to three. Another distribution day is set to expire this Friday. Decreasing distribution day count is a good sign. However, if the index breaches its 50-DMA, we may downgrade the status to an Uptrend Under Pressure. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.