At 8:00am IST, the SGX Nifty Futures was trading at 11,837, compared with Nifty’s close of 11,767 yesterday.
Market status: Rally Attempt
Global stock markets: Dow 30, -2.3%; S&P, -1.9%; Nasdaq, -1.6%; Nikkei, -0.3%; Kospi, +0.1%; Hang Seng, -0.5%
Yesterday, Nifty opened with modest losses. It moved sideways in early hours, but selling pressure intensified in the second half, dragging it below 11,800. Nifty closed less than a percent above its 21-DMA. Nifty is trading 2.3% and 10.0% above its 50- and 200-DMA, respectively. Yesterday’s volume was sligthly higher than Friday’s session.
On the sectoral front, Nifty Auto and Metal closed with a loss of more than 3%. Nifty Bank, Financial Services, Pharma, and IT closed 1–2% lower. The selling was broad-based. Of 2,229 stocks traded, 1,219 advanced, 645 declined, and the rest remained unchanged.
Looking forward, we prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day. However, we are positive on the general market as we can find further evidence of good behavior in leaders that have already broken out; for example, HDFC Bank, Reliance, Infosys, and Asian Paints. During this time, one should look for stocks with quality fundamentals, RS line trending higher, and breaking out from consolidation areas.
Finolex Industries (Nse) reported Q2 FY21 results. Standalone revenue from operations grew 1.6% y/y to Rs 585.8 crore; PAT increased 16.7% to Rs 119.7 crore.
Torrent Pharmaceuticals reported Q2 FY21 results. Consolidated revenue from operations increased 0.6% y/y to Rs 2,017 crore, while PAT grew 27.1% to Rs 310 crore.
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, 16%; Rally Attempt, 8%; Uptrend Under Pressure, 76%; Downtrend, 0%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 30%; Rally Attempt, 20%; Uptrend Under Pressure, 46%; Downtrend, 4%.