Category: Daily Big Picture

Today’s Action

Nifty, +0.9%; Sensex, +0.9%; Nifty Midcap, +1.3%; Nifty Smallcap, +1.7%; Model Portfolio, +1.3%

Market Pulse: Uptend Under Pressure

Distribution Day Count: Seven

Nifty opened 100 points higher and reclaimed its 21- and 50-DMA. The volume was relatively higher. Nifty made an intraday high of 14,880 but closed 60 points off highs. On the sectoral front, all indices closed in the green. Nifty Bank, Financial Services, Auto, and IT closed 1.0–1.5% higher. Broader market outperformed the benchmark indices. The advance-decline ratio was in favor of advancers. Of 2,255 stocks traded, 1,264 advanced, 621 declined, and the rest remained unchanged.

The RBI’s MPC unanimously decided to keep the repo rate unchanged at 4%. It continued to maintain its accommodative stance as long as necessary to revive growth. Reverse repo rate remains unchanged at 3.35%. Marginal standing facility and bank rate remain unchanged at 4.25% each. The MPC maintained its GDP growth forecast at 10.5% for FY22.

Market Status Overview

Today, Nifty reclaimed its 21- and 50-DMA, and managed to close above it. However, the distribution day count remains high (seven), with one expiring tomorrow. 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.

Today’s Action

Nifty, +0.3%; Sensex, +0.1%; Nifty Midcap, +0.9%; Nifty Smallcap, +1.4%; Model Portfolio, +2.1%

Market Pulse: Uptend Under Pressure

Distribution Day Count: Seven

Nifty opened 100 points higher and it advanced further to make intraday high of 14,779. As with the previous few sessions, it succumbed to selling pressure to turned negative intraday. Later some buying helped the index to close with a gain of 0.3%. Of Nifty50 stocks, 62% of the stocks advanced, led by Adani Ports and Special Economic Zone (+12.6%) and Tata Consumer Products (+4.6%). On the flip side, Power Grid Corp.Of India (-2.3%) and Grasim Industries (-0.9%) were the major decliners.

Barring Nifty Media and financial-related sectors, all the sectoral indices closed in the green. Nifty Pharma (+1.8%) and Metal (+1.4%) were the top advancers. The advance-decline ratio was in favor of advancers. Of 2,255 stocks traded, 1,157 advanced, 736 declined, and the rest remained unchanged.

Market Status Overview

– Nifty breached its 21- and 50-DMA yesterday, after hovering around its key moving averages in the past few weeks. Index breaching its moving averages is a sign of weakness. Today, it found resistance around its 50-DMA. We will change the status to a Downtrend, if Nifty doesn’t retake its 50-DMA 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 higher number of distribution days, 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.