Volatility Grips Markets Due to Weekly Expiry; IT Stocks Rally

Nifty, +0.8%; Sensex, +0.8%; Nifty Midcap, +0.1%; Nifty Smallcap, -0.2%; Model Portfolio, -0.1%

Market Pulse Rally Attempt

Nifty had yet another gap up opening to continue its positive momentum. After opening around 100 points higher, it made an intraday high of 11,905. It was a calm trading session with a clear uptrend in the morning session, but sharp selling was seen in the last 90 minutes. 56% of Nifty50 stocks advanced today led by Wipro (Nse) (+7.2%) and Cipla (+4.9%).

Barring Nifty Media (-0.5%) and FMCG (-0.1%), all the sectoral indices closed higher. Nifty IT (+3.2%) advanced the most, followed by Nifty Pharma (+2.5%) and Bank (+1.0%). The advance-decline ratio was in favor of decliners. Of 2,220 stocks traded, 997 declined, 840 advanced, and the rest remained unchanged.

Looking forward, we would 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. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.