Nifty Scales Fresh High; Broader Market Outperforms

Nifty, +0.5%; Sensex, +0.4%; Nifty Midcap, +1.2%; Nifty Smallcap, +1.6%; Model Portfolio, +1.6%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Nifty, after opening higher, was volatile in the first hour. It gained strength as the day progressed and made a new all-time high. Nifty was able to hold gains and closed in the top quartile of the day’s range. Volume was comparatively low. The broader market outperformed. Stocks related to utilities, food and beverages were among the top gainers in the midcap and smallcap categories.

On the sectoral front, there was mixed action. Nifty Financial Services, Metal, and Pharma closed 0.2-0.4% lower.  On the flip side, Nifty IT, FMCG, and Auto closed 0.4-1% higher. Nifty50 is trading around 3.5% and 6% above its 21-and 50-DMA, respectively. The advance-decline ratio was in favor of advancers, as out of 2,300 stocks traded, 1,380 stocks advanced, 610 stocks declined, and the remaining closed flat.

NIF

Nifty making a new high, the broader market back in momentum, distribution day count down to two, and no distribution day after May 11 are positive signs for a sustainable rally. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. 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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