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Nifty Turns Volatile as it Makes New ATH; Indusind Bank Releases its Q3 FY21 Update

January 05 2021

Today’s Action

Nifty, +0.5%; Sensex, +0.5%; Nifty Midcap, +0.7%; Nifty Smallcap, +0.6%; Model Portfolio, +2.1%

Market Pulse Confirmed Uptrend

Distribution Day Count: Two

Nifty opened on a negative note and made an intraday low of 14,048 within the first hour. As the session progressed, it advanced higher but was volatile throughout the session. Volume was lower than the previous session.  The broader market slightly outperformed compared with the general market. Midcap closed 0.7% higher, while smallcap was up 0.6%.

It was a mixed reaction on the sectoral front. Nifty IT (+2.6%) advanced the most followed by Nifty Pvt Bank which was up 1.9%. On the flip side, Nifty Metal (-1.4%) declined the most followed by Realty (-0.4%) and Auto (-0.02%). Market breadth was skewed toward advancers. Of 2,222 stocks traded, 1,084 advanced, 842 declined, and the remaining were unchanged.

With leadership broadening and indices above relevant intermediate-term moving averages, we will continue to look for leadership-quality growth names to form entry points. If a pullback/consolidation happens, it will be crucial for Nifty to hold its 21-DMA. It is advised to closely review the existing positions and book profits in stocks that are extended from their moving averages and showing technical weakness. Also, tracking distribution days is crucial as rise in distribution days can halt the uptrend.

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