Category: Daily Big Picture

Today’s Action

Nifty, +0.5%; Sensex, +0.5%; Nifty Midcap, +0.1%; Nifty Smallcap, -0.2%; Model Portfolio, +0.04%

Market Pulse: Downtrend

Nifty started the session on a flat note but was down more than 170 points in the first half of the day. Strong buying in the second half helped Nifty pare its losses and end 0.5% higher. Hence, for the second consecutive session, Nifty ended near its day’s high, which is a good sign. Today’s volume was slightly lower than the previous session. Of Nifty50 stocks, 56% closed in the green, led by Tata Consultancy Svs. (+3.7%) and Wipro (Nse) (+2.8%).

On the sectoral front, it was a mixed reaction. Nifty Pharma (+1.4%) and Metal (+1.4%) advanced the most, followed by Nifty Fin Services (+1.2%). On the flip side, Nifty Auto (-1.3%) and PSU Bank (-1.3%) were the major decliners. The advance-decline ratio was in favor of decliners. Of the 2,253 stocks traded, 761 advanced, 1,117 declined, and the rest remained unchanged.

Market Status Overview

– We moved the market to a Downtrend on Monday as Nifty breached its 50-DMA on higher volume, distribution day count increased to seven, and many leading stocks failed to hold their logical support levels.

– Today’s session will be considered Day 2 of an attempted rally as Nifty traded above yesterday’s low of (14,249). We need one more such session to change the market status to a Rally Attempt.

– From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing the best relative strength, with good accumulation.

Today’s Action

Nifty, +1.4%; Sensex, +1.4%; Nifty Midcap, +1.7%; Nifty Smallcap, +1.3%; Model Portfolio, +1.0%

Market Pulse: Downtrend

Distribution Day Count: Seven

Nifty started the session on a flat note and was up about 1% in the first hour of trading. It pared gains in the next couple of hours and briefly turned negative. Strong buying in the second half helped Nifty close near its day’s high. Today’s volume was slightly lower than the previous session. Of Nifty50 stocks, 76% closed in the green, led by Mahindra & Mahindra (+7.9%) and Bajaj Finserv (+7.0%).

Barring Nifty IT (-3.3%) and Pharma (-1.2%), all sectoral indices closed in the green. Nifty PSU Bank (+4.5%) advanced the most, followed by Auto (+4.3%). Financial-related sectors, which dragged the market in the last few sessions, led the rally today. The advance-decline ratio was in favor of advancers. Of the 2,254 stocks traded, 1,386 advanced, 507 declined, and the rest remained unchanged.

Market Status Overview

– Yesterday, we moved the market to a Downtrend as Nifty breached its 50-DMA on higher volume, distribution day count increased to seven, and many leading stocks failed to hold their logical support levels.

– Today’s session will be considered day 1 of an attempted rally as Nifty traded above yesterday’s low of (14,249). We need two more such sessions to change the market status to a Rally Attempt.

– From there, we would prefer to see a [follow-through day] before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing the best relative strength, with good accumulation.

Today’s Action

Nifty, -3.5%; Sensex, -3.5%; Nifty Midcap, -5.5%; Nifty Smallcap, -5.5%; Model Portfolio, -3.7%

Market Pulse: Downtrend

Distribution Day Count: Seven

Nifty opened over 200 points lower amid imposition of night curfews in several states and possibility of imposition of lockdown in Maharashtra. Losses intensified as the session progressed. It lost another ~350 points from opening and closed 600 points lower compared with the previous session. Today’s session qualified as a distribution day as the fall was higher than 0.2% on volume higher than the previous session. Nifty found support at its 100-DMA, which has been a crucial historical support.

Barring Nifty Pharma (+0.5%), all the sectoral indices closed in the red. Nifty PSU Bank (-8.7%) declined the most followed by Realty (-7.3%). Financial-related sectors continued to drag the market down. Broader market underperformed the benchmark indices. The advance-decline ratio was in favor of decliners. Of 2,294 stocks traded, 241 advanced, 1,740 declined, and the rest remained unchanged.

Market Status Overview

– We moved the market to a Downtrend as Nifty breached its 50-DMA on higher volume, distribution day count increased to seven, and many leading stocks failed to hold logical support levels.

– Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (14,249) for three straight sessions. From there, we would prefer to see a [follow-through day] before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of the early-stage base patterns and showing the best relative strength with good accumulation.

Weekly Action

Nifty, -0.2%; Sensex, -0.9%; Nifty Midcap, +1.4%; Nifty Smallcap, +3.3%; Model Portfolio, +3.8%.

Market Pulse Uptend Under Pressure

Distribution Day Count: Six

Weekly Market Review

Nifty was trading close to its 50-DMA throughout the week. It breached its 50-DMA on Monday and retook on Wednesday. Today’s session was rangebound compared with previous sessions, but the index closed above its 50-DMA after breaching it intraday. Trading volume continued to be below average for the current week as well. Advance-decline ratio was in favor of advancers. Out of 2,256 stocks, 1,097 advanced, 786 declined, and the rest remained unchanged.

On a weekly basis, sectoral reaction was mixed. Nifty Metal (+6.6%) advanced the most, followed by IT (+5.3%) and Pharma (+5.0%). Financial indices declined the most.

Market Status Overview

– The index is currently hovering around its key moving averages. From here, we would like the index to firmly trade above its key moving averages. On the flip side, we will change the status to a [Downtrend], if one more distribution day is added or if Nifty makes a decisive breach of its key moving averages and if market leaders show signs of deterioration in their price actions.

– Under current market conjecture, since we are in an Uptrend Under Pressure with distribution day count on the higher side, investors should consider booking profits in 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.

Today’s Action

Nifty, +0.4%; Sensex, +0.2%; Nifty Midcap, +0.5%; Nifty Smallcap, +1.2%; Model Portfolio, +1.4%

Market Pulse: Uptend Under Pressure

Distribution Day Count: Six

Nifty opened higher and remained in the green throughout the day. However, it was highly volatile during the session on account of weekly F&O expiry. At one point, Nifty was up over 1% but it quickly pared gains and ended just 0.4% higher. Of Nifty50 stocks, 62% of the stocks closed in the green led by Jsw Steel (+9.2%) and Tata Steel (+4.9%).

On the sectoral front, the majority of indices closed in the green. Nifty Metal (+3.9%) advanced the most followed by IT (+1.2%). Financial related sectors continued to drag the market down. Broader market outperformed the benchmark indices. The advance-decline ratio was in favor of advancers. Of 2,254 stocks traded, 1,233 advanced, 668 declined, and the rest remained unchanged.

Market Status Overview

Yesterday, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. However, the distribution day count remains high at six. If Nifty remains above moving averages and advances from there, focus on quality ideas, ideally from leading and/or improving sectors and groups that are emerging from constructive consolidation. Avoid or reduce risk in lagging ideas, trading below major moving averages.

On the flip side, we will change the status to a Downtrend, if Nifty breaches its 50-DMA and if market leaders show signs of deterioration in their price actions. If that happens, investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. 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.