Nifty Registers its Longest Winning Streak Since November; PSU Bank Stocks Rally

June 03 2020

Market Pulse : Confirmed Uptrend

Nifty opened with a gap of more than 100 points today. It traded sideways and further buying was seen post noon. However, last hour sell off erased majority of the gains. Still it managed to close positive for the session and this was Nifty's longest winning streak since November 2019. Volume was higher compared with the previous session. 68% of Nifty50 stocks ended in the green, led by Mahindra & Mahindra (+4.8%) and Bajaj Finance (+2.8%).

Barring Nifty IT (-0.7%) and Metal (-0.2%), all sectoral indices closed in the green. Nifty PSU Bank (+5.1%) led the rally followed by Nifty Realty (+3.1%) and Bank (+2.0%) indicating Nifty's longest winning streak. The advance-decline ratio was inclined toward advancers. Of 2,122 stocks traded, 1,241 advanced, 568 declined, and the remaining traded flat.

The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions. We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength or simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. 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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