MarketsmithIndia Articles

SGX Nifty Indicates Higher Opening; Adani Energy to Acquire a 50MW Solar Unit

March 22 2021
Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 14,840, compared with Nifty’s close of 14,744 on Friday.

Market status: Uptrend Under Pressure

Distribution days: Six

Global stock markets: Dow30, -0.7%; S&P 500, -0.1%; Nasdaq, +0.8%; Nikkei, -1.7%; Hang Seng, +0.2%; Kospi, -0.1%

Nifty started the last week on a negative note and closed below its 21-DMA on Monday. Selling pressure intensified as the week passed and pushed Nifty below its 50-DMA on Wednesday. Market status was downgraded to an Uptrend Under Pressure. On Friday, after a gap-down opening, Nifty staged an upside reversal and reclaimed its 50-DMA (intraday) but closed briefly below it. Advance-decline ratio was in favor of advancers. Out of 2,238 stocks, 997 advanced, 875 declined, and the rest remained unchanged.

On a weekly basis, barring Nifty FMCG (+2.9%), all other sectoral indices closed in the red. Nifty Realty (-5.9%) was the top decliner. Nifty Pharma, Bank, and Financial Services closed 3–4% lower.

On Wednesday, we downgraded the market status to an Uptrend Under Pressure as the distribution day count increased. Also, Nifty had breached its 21-DMA on Monday and its 50-DMA on Wednesday. Currently, the distribution day count stands at six. Though Friday’s upside reversal was a good sign, we will wait for Nifty to close above its 21- and 50-DMA for a fresh entry. We will change the status to a Downtrend, if one more distribution day is added or if Nifty fails to reclaim its 50-DMA and market leaders show signs of deterioration in their price actions.

Investors should consider booking profits in the stocks that have performed well and have advanced 20–25% from their ideal buy points. Even if the market undergoes a small correction, these stocks are more likely to consolidate and test their moving averages. Further, stocks slipping below their 50- and 200-DMA on above average volume should be sold. Consider exiting stocks that have declined 8% from your buy price. On the flip side, a stock can be held if it is holding around its key moving averages and is resilient in a falling market with low volume activity.

Key News

Adani Green Energy has signed an agreement with SkyPower Global to acquire a SPV that owns a 50MW solar unit in Telangana.

Zomato plans to raise $650M through IPO. It could go public by September.

Gold imports declined 3.3% y/y to $26.1B during the first 11 months of the current financial year, while in February, imports jumped 124.5% y/y to $5.3B.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 38%; Rally Attempt, 4%; Uptrend Under Pressure, 54%; Downtrend, 4%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 64%; Rally Attempt, 4%; Uptrend Under Pressure, 32%; Downtrend, 0%.

What do you think? Please email us any questions or comments.

Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.

Related Article