Nifty Surrenders Intraday Gains; FMCG and IT Stocks Lead, Banks and Metals Lag

Today’s Action

Nifty, -0.1%; Sensex, -0.1%; Nifty Midcap, +0.4%; Nifty Smallcap, +0.3%; Model Portfolio, +1%

Market Pulse Confirmed Uptrend

Distribution Day Count : Four

Nifty gapped up and reclaimed its 21-DMA in the opening hour. In the second half, it came under selling pressure and breached the 21-DMA, closing about 130 points off highs. Volume was comparatively low. On the sectoral front, there was a mixed action. Nifty Bank, Financial Services, and Metal closed 0.7–1% lower. On the flip side, Nifty FMCG and IT closed more than 1% higher. The broader market outperformed benchmark indices. Nifty midcap and smallcap indices closed 0.4% and 0.3% higher, respectively. The advance-decline ratio was in favor of decliners. Of 2,238 stocks traded, 886 advanced, 1,005 declined, and the rest remained unchanged.

Market Status Overview

- Last week, one distribution day was added, taking the total count to four. For the last few days, Nifty was oscillating around its 21-DMA but breached it yesterday and failed to hold above it today. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions.

- Looking ahead, we may downgrade the status to an Uptrend Under Pressure if Nifty slips further below its 21-DMA and/or the distribution day count increases to five. Further, we may downgrade the status to a Downtrend if Nifty breaches its 50-DMA, distribution day count remains elevated, and leading stocks break below key support levels. On the flip side, the confidence on uptrend will enhance if Nifty reclaims the 21-DMA and makes a move toward a new high or stages an additional follow-through day.