Nifty Stages a Reversal, Closes Above 10,800; Tata Steel Q1 FY21 Sales Fell 23% y/y

Today’s Action

Nifty, +1%; Sensex, +1.1%; Nifty Midcap,+0.4%; Nifty Smallcap, +1.1%; Model Portfolio, +1.7%

Market Pulse Confirmed Uptrend

Nifty, taking cues from global markets, opened 50 points higher following a decline in yesterday’s session. It retained the positive momentum throughout the day and closed above 10,800, holding significant gains. The volume was lower than the previous session. Leadership was once again very strong, with many leaders up 2% or more. In the broader market, Nifty Midcap and Smallcap closed with a gain of 0.4% and 1.1%, respectively.

On the sectoral front, barring Nifty FMCG (-0.3%), all other sectors closed in the green. Nifty Metal (+2%) gained the most, followed by Nifty Financial Service and Nifty Bank, which were up 1.6% and 1.4%, respectively. Market breadth was inclined toward advancers. Of 2,130 stocks traded, 1,010 advanced, 799 declined, and the remaining traded flat.

The Indian market remains in a Confirmed Uptrend. However, things can change quickly due to high volatility. We will continue to monitor the behavior of leading stocks and keep an open mind as to how it unfolds. We will wait for solid entry points before buying. The O'Neil Methodology is a process to isolate leading stocks and buy them after a period of consolidation in order to be able to capitalize on an emerging trend. It is prudent to only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.

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