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Nifty Stages Smart Recovery in the Last Hour; Maruti’s August Production up 11% y/y

September 07 2020
Today’s Action

Nifty, +0.2%; Sensex, +0.2%; Nifty Midcap, -0.9%; Nifty Smallcap, +0.1%; Model Portfolio, +0.9%

Market Pulse Uptrend Under Pressure

Distribution Day Count: Four

Nifty opened with moderate gains, but dropped more than 100 points in the first hour itself. It traded in a narrow range during the day. However, good buying in the last hour helped Nifty close 20bps higher. Volume was comparatively lower. One distribution day expired today as 25 trading days have passed and that day of liquidation became irrelevant. There was mixed action among broader indices. Nifty Midcap closed with notable loss, while Nifty Smallcap closed briefly in the green. On the sectoral front, only Nifty IT, FMCG, and Media closed higher. Nifty Realty closed 1% lower, while Nifty Bank, Financial Services, and Auto closed 0.2–0.5% lower. Out of 2,189 stocks traded, 754 advanced, 1,097 declined, and the rest remain unchanged.

As the market condition has changed to an Uptrend Under Pressure, investors should proceed ahead with caution. Unless a stock shows exceptional fundamental and technical strength, no new addition to the portfolio is advised. Investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Looking forward, we will change the status to a Downtrend, if more distribution days are added or if Nifty breaches the 50-DMA (11,117) and the 200-DMA (10,807). On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 11,795 level (high during the recent rally).

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