Nifty Turns Volatile Due to Monthly Expiry of F&O Contracts; All Sectors Advance

Today’s Action

Nifty, +1.0%; Sensex, +1.0%; Nifty Midcap, +0.9%; Nifty Smallcap, +0.9%; Model Portfolio, +0.5%

Market Pulse Confirmed Uptrend

Distribution Day Count: Two

Today, Nifty opened on a slightly positive note. It quickly succumbed to selling pressure and turned negative to make an intraday low of 12,790. Fresh buying was seen post noon as Nifty rallied more than 200 points from the day's low. Today’s session was highly volatile as the November month futures and options contracts expired. 84% of Nifty50 stocks advanced today, led by Jsw Steel (+6.2%) and Tata Steel (+5.0%).

All the sectoral indices closed in the green. Nifty Metal (+3.9%) advanced the most, followed by PSU Bank (+1.9%) and Fin Services (+1.6%). Market breadth was in favor of advancers. Of 2,215 stocks traded, 1,261 advanced, 588 declined, and the rest remained unchanged.

Our strength lies in our risk management system. We are prudent when it comes to capital preservation. Our article on how to preserve capital: https://blog.marketsmithindia.com/know-how-to-preserve-your-hard-earned-capital/

Though we are in a Confirmed Uptrend, we need to be prudent and cautious while adding fresh positions, as Nifty is currently trading ~20% above its 200-DMA, which is rare. We expect some pullback in the market. However, a small pullback/consolidation is a constructive sign if Nifty holds its 21-DMA. It is advised to closely review the existing positions and book partial profits in stocks that are extended from their moving averages. We will look for leadership among some good stocks to push the market up. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can halt the uptrend.