Nifty Closes Near Day’s Low; Metals Underperform

Today’s Action

Nifty, -0.8%; Sensex, -0.7%; Nifty Midcap, -0.1%; Nifty Smallcap, -0.2%; Model Portfolio, -0.6%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Nifty, after opening briefly in the green, turned negative in the opening hour. It continued to trend lower and closed near the day’s low. Volume was lower than the previous session, which helped the index avoid a distribution day. Broader indices performed better than benchmark indices. The advance-decline ratio was in favor of decliners. Of the 2,259 stocks traded, 937 advanced, 972 declined, and the rest remained unchanged. On the sectoral front, barring Nifty Realty (+1%) and PSU Bank (+0.7%), all other indices closed in the red. Nifty Metal closed more than 3% lower. Nifty Auto, Bank, Financial Service, FMCG, and IT closed 0.2–1.0% lower.

Nifty recently retook its 50-DMA, which is a positive sign. We would like the index to hold its 50-DMA and trade above that. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Focus on quality ideas emerging out of sound bases with relative strength line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News

Relaxo Footwears announced its Q4 FY21 results. Revenue was up 38.3% y/y to Rs 747 crore. PAT increased 97% y/y to Rs 102.2 crore. Margin expanded 400bps y/y to 21.8%.

Unichem Laboratories received approval from the U.S. FDA for its Amitriptyline HCl Tablets USP.

Bosch announced its Q4 FY21 results. Revenue grew 44% y/y to Rs 3,216 crore. The company reported a profit of Rs 483 crore against a profit of Rs 81 crore for the corresponding period last year. Margin expanded 400bps to 19.2%.

Related article:

Portfolio Closes 0.6% Lower Against Nifty’s Decline of 0.8%

SGX Nifty Indicates Muted Opening; Havells India and Zee Entertainment to Report Results Today

At 8:00 am IST, SGX Nifty Futures was trading at 15,022, compared with Nifty’s close of 15,030, yesterday.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Global stock markets: Dow30, -0.5%; S&P 500, -0.3%; Nasdaq, -0.03%; Kospi, -0.4%; Nikkei, +0.1%; Shanghai Composite, -0.4%

Nifty, after opening lower yesterday, traded toward the day’s high of 15,133 in the initial hour. However, it staged a reversal from there amid profit booking and closed near the day’s low holding 0.5% loss. Volume was lower than the previous session, which helped the index avoid a distribution day. Broader indices performed better than benchmark indices. Nifty Midcap closed 0.1% lower, while Smallcap advanced 0.6%.

On the sectoral front, mixed reactions were observed. Nifty Realty (+2.2%) led the gains followed by Nifty Media and Nifty Pharma, which advanced 2.0% and 1.2%, respectively. On the flip side, Nifty Fin Service (-1%) was the major decliner, while Nifty MetalNifty BANK, and Nifty Auto declined 0.7–0.9%. The advance-decline ratio was in favor of advancers. Of the 2,258 stocks traded, 1,069 advanced, 833 declined, and the rest remained unchanged.

Nifty recently retook its 50-DMA, which is a positive sign. We would like the index to hold its 50-DMA and trade above that. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

Key Results Today: Havell’s IndiaZee Entertainment Ents.Hindustan Ptl. (Nse)Torrent PowerKnr Constructions, and others.

Key News:

J K Tyre & Inds. reported its Q4 FY21 results. Consolidated revenue was up 63.3% y/y to Rs 2,927 crore. It reported a profit of Rs 189 crore compared with a loss of Rs 47 crore in Q4 FY20.

Endurance Technologies reported its Q4 FY21 results. Revenue increased 33.6% y/y to Rs 2,132 crore. PAT grew 76.4% to Rs 187 crore.

Rajesh Exports (Nse): Life Insurance Corporation of India acquired another 2.025% stake, increasing it to 9.07% from 7.045% in the company.

Buy Watchlist: Sharda CropchemAstralI G PetrochemicalsThirumalai ChemicalsIcici BankBlue Dart ExpressDhanuka AgritechRamkrishna ForgingsRelaxo FootwearsGujarat State PetronetApollo Hosps.EnterpriseAsian PaintsApollo Tricoat TubesCoromandel International, and Guj.Ste.Fert.& Chems.

Related Articles:

Auto, Metal, and Financial Stocks Drag the Index; Indian Oil Q4 Results Beat Consensus on All Fronts

Portfolio Closes Flat Against Nifty’s Decline of 0.5%

SGX Nifty Indicates Flat Opening; L&T and Dr Reddy to Declare Q4 Results Today

At 8:00 am IST, SGX Nifty Futures was trading at 14,670, compared with Nifty’s close of 14,696, Wednesday.

Market Pulse: Confirmed Uptrend

Distribution Day CountThree

Global stock markets: Dow30, +1.3; S&P 500, +1.2%; Nasdaq, +0.7%; Kospi, +0.6%; Nikkei, +1.6%; Shanghai Composite, +0.6%

On Wednesday, Nifty opened flat and quickly succumbed to selling pressure and lost over 120 points within the first two hours of trading. The index pared most of its losses as some buying was seen at the lower levels. But as the selling pressure overtook the index again, Nifty closed near the day’s low. The index escaped a distribution day as the volume was slightly lower than yesterday’s. There was a mixed action on the sectoral front. Nifty PSU Bank (+3.2%), Media (+0.7%), and Auto (+0.2%) closed higher. On the flipside, Nifty Metal (-2.9%) declined the most followed by financial-related stocks especially private banks.

On a technical perspective, Nifty breached its 50-DMA, which is not a good sign. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

Key Results Today: Larsen & ToubroDr. Reddy’s LaboratoriesBalkrishna IndustriesCiplaEscorts, and others.

Key News:

Hindalco Industries’s subsidiary Novelis’ Q4 PAT grew 186% y/y to $180M. Net sales increased 33% y/y to $3.6B.

Pidilite Industries(Nse)’s Q4 FY21 PAT and revenue came above consensus, while margin missed estimates. PAT nearly doubled y/y to Rs 307 crore.

Birla Corporation (Nse)’s Q4 FY21 PAT and revenue came above consensus, while margin missed estimates. PAT grew 27.7% y/y to Rs 249 crore. Revenue grew 26% y/y to Rs 2,132 crore. Margin contracted 200bps to 18.4%.

Buy Watchlist: Ramkrishna ForgingsHindustan Zinc (Nse)Pi IndustriesRelaxo FootwearsTata PowerGujarat State PetronetApollo Hosps.EnterpriseEris LifesciencesAsian PaintsWipro (Nse)Amrutanjan Health CareLux IndustriesRain IndustriesApollo Tricoat Tubes, and Balkrishna Industries

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Nifty Continues to Edge Higher; Metal and Pharma Stocks Outperform

Daily_Market_Outlook

Today’s Action

Nifty, +0.8%; Sensex, +0.6%; Nifty Midcap, +0.9%; Nifty Smallcap, +1.5%; Model Portfolio, +1.3%

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Nifty started the session on a positive note, opening around 100 points higher. It traded in a narrow range of just 70 points relatively lower than in recent times. Thus, it closed in the green for the fourth consecutive session, advancing almost 450 points. Of Nifty50 stocks, 76% closed in the green, led by Coal India (Nse) (+7.5%) and UPL (+7.2%).

All sectoral indices closed in the green. Nifty Metal (+3.1%) and Pharma (+2.8%) advanced the most. The advance-decline ratio was in favor of advancers. Of the 2,298 stocks traded, 1,344 advanced, 612 declined, and the rest remained unchanged.

Currently, Nifty is just 4% off highs, but it has advanced higher on less than average volume, which is not a good sign. Ideally, we would want the volume to be above average for any upward move. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further and adds a couple of distribution days, we may change the market status to an Uptend Under Pressure. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

Key News

Nifty Reclaims 21-DMA; Pharma and Banking Stocks Outperform

Today’s Action

 

Nifty, +0.8%; Sensex, +0.9%; Nifty Midcap, +1%; Nifty Smallcap, +0.4%; Model Portfolio, +1%

 

Market Pulse: Confirmed uptrend

 

Distribution Day Count: Two

 

Nifty gapped higher and managed to hold gains. In the last hour, it further moved higher and closed near day’s high. Volume was relatively lower. Today, Nifty reclaimed its 21-DMA and is now trading less than 1% below its 50-DMA. Broader market was also in momentum. Nifty Next50 is now only about 2% below its all-time high. The advance-decline ratio was in favor of advancers. Of the 2,250 stocks traded, 1,198 advanced, 627 declined, and the rest remained unchanged.

 

On the sectoral front, barring Nifty Realty (-1%), all other sectors closed in the green. Nifty Pharma (+4%) was the top gainer, followed by Nifty Bank (+1.5%). These were in momentum as RBI announced to provide immediate liquidity for ramping up COVID-19-related healthcare infrastructure and services by providing an on-tap liquidity window of Rs 50,000 crore with tenors of up to three years. Also, RBI opened a second window for the individual and small borrowers having loans up to Rs 25 crore for restructuring (if not availed earlier).

 

Looking ahead, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If Nifty falls further and adds a couple of more distribution days, we may change the market status to an Uptrend Under Pressure. On the flip side, if Nifty reclaims its 50-DMA and moves higher, stocks that are breaking out of consolidation with higher relative strength and superior fundamentals can do well. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages.

 

Key News