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

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%.