At 8:00 am IST, the SGX Nifty Futures was trading at 10,106, compared with Nifty’s close of 10,047 yesterday.
Market status: Confirmed Uptrend
Global stock markets: Dow 30, -1.1%; S&P 500, -0.8%; Nasdaq, +0.3%; KOSPI, +0.4%; Nikkei, +0.2%; Hang Seng, +0.8%; Shanghai Composite, -0.4%.
Yesterday, Nifty opened on a flat note and quickly advanced about 100 points to make an intraday high of 10,291. However, it quickly succumbed to selling pressure post noon and lost over 200 points from the day's high to close 119bps lower for the day. As volume was lower than that of the Monday’s session, Nifty escaped distribution. Likewise, yesterday, it tested its 100-DMA (10,282) and failed to close above it. On the sectoral front, barring Nifty Pharma (+1.8%) and FMCG (+0.1%) all the indices closed lower. Nifty Media (-3.3%) and Nifty Bank (-2.2%) were the major decliners.
Historically, 100-DMA has been a crucial level to watch for Nifty. The confidence in the current rally will build up if Nifty is able to retake its 100-DMA. In addition, Nifty’s 50-DMA started to turn upward and the broader market participation in the rally is a good sign. We remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases.
At the beginning of the move in the general market, there are usually a few stocks that have already completed bases and are breaking out. Often, these early leaders will cluster into groups that may represent where the most institutional appetite exists. Ideally, this is where we try to "buy right." There are a few things that work to our favor when we do this. One is that these primary leaders usually have bigger upside moves and will lead throughout a cycle. A second is that the cushion we gain as the trend progresses allows us to truly capitalize on the move. O'Neil has said that if you can get through the first correction you are in the driver's seat. That cushion from "buying right" allows for a clear head when determining if normal volatility is a threat to your position or not.
Maruti Suzuki India reported production of 3,714 vehicles in May against 1,51,188 vehicles in the same month last year.
Gujarat Pipavav Port reported Q4 FY20 results. Revenue stood at Rs 161.9 crore as against Rs 180.1 crore for the same period year ago, while profit was down 6.7% y/y to Rs 47.2 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, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.
For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 92%; Rally Attempt, 0%; Uptrend Under Pressure, 8%; Downtrend, 0%.