Nifty Reclaims its 50-DMA During the Week; Financials and Realty Stocks Outperform

Weekly Action

Nifty, +3.4%; Sensex, +3.7%; Nifty Midcap, +4.3%; Nifty Smallcap, +3.8%; Model Portfolio, +2.8%.

Market Pulse:  Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

Nifty remained volatile throughout the week. It started the week with retaking its 50-DMA on Monday and extended the gain in the next session to close above 15,100. However, it staged a reversal there and pared about 1.3% of its gain on Wednesday and Thursday. Today, the index opened, advancing about 80 points, and continued gaining momentum in the whole session to close near the day’s high, holding significant gains. Further, today’s action qualified as an additional follow through day as the index closed with more than 1.5% gain on higher volume than on the previous day.

On the sectoral front, barring Nifty FMCG (-0.3%), all sectors closed in the green. Sectors related to financials posted solid performance. Nifty Bank (+7.6%) was the top gainer for the week, followed by Nifty Pvt Bank (+7.3%) and Nifty PSU Bank (+7%). Further, Nifty Realty and Nifty Financial Services gained more than 6% for the week. Today, the advance-decline ratio was in favor of advancers. Of the 2,260 stocks traded, 1,199 advanced, 723 declined, and the rest remained unchanged.

This week, Nifty retook its 50-DMA, did not add a distribution day, and registered an additional follow through day, which are positive signs. 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 Uptrend 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

Hindalco Industries ’s Q4 FY21 revenue grew 44.2% y/y to Rs 14,412 crore. PAT was up 51.8% y/y to Rs 495 crore. EBITDA was up 30.3% y/y to Rs 1,487 crore.

Dhanuka Agritech announced its Q4 FY21 results. Consolidated revenue from operations grew 21.1% y/y to Rs 275.6 crore. PAT was up 24.7% y/y to Rs 48.6 crore. EBITDA advanced 41.2% y/y to Rs 64.6 crore.

State Bank Of India announced its Q4 FY21 results. NII declined 18.9% y/y to Rs 27,067 crore. PAT surged 80.1% y/y to Rs 6,451 crore. Provisions stood at Rs 11,051 crore as against Rs 13,495.1 crore in Q4 FY20

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Nifty Declines 1% During the week; Metal Stocks Succumbed to Profit Booking

Weekly Action

Nifty, -1.0%; Sensex, -1.0%; Nifty Midcap, -0.7%; Nifty Smallcap, +0.3%; Model Portfolio, +0%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

After retaking its 50-DMA last week, Nifty breached that level this week. The next level of support at its 100-DMA is just 100 points below the closing price. Historically, 100-DMA has been a good support for Nifty. Today, it opened with a 50-point gain, but succumbed to profit booking and quickly turned negative. It was a volatile session as the day’s range was more than 150 points.

On the sectoral front, Nifty PSU Bank (+3.7%) was the top gainer for the week, followed by Nifty Media (+2.4%). On the flip side, Nifty Metal (-4.6%) which rallied the most in the past few weeks, succumbed to profit booking during the week. Today, the advance-decline ratio was in favor of decliners. Of the 2,264 stocks traded, 777 advanced, 1,142 declined, and the rest remained unchanged.

One distribution day was added during the week, increasing the count to three. Nifty trading below its 50-DMA is a cautious sign. We expect the Nifty to hold its 100-DMA. However, if it breaches its 100-DMA, it opens further downside. Continue to trim or avoid ideas lagging and/or breaking down below major moving averages. We would downgrade the market status to an Uptrend Under Pressure if Nifty breaches its 100-DMA and/or distribution day count increases.

Key News

Dr. Reddy’s Laboratories  Q4 FY21 revenue grew 6.7% y/y to Rs 4,728 crore. PAT was down 27.5% y/y to Rs 554 crore. It also announced a dividend of Rs 25 per share.

Jindal Stainless announced its Q4 FY21 results. Consolidated revenue from operations grew 26.5% y/y to Rs 3,913 crore. It reported a profit of Rs 292 crore against a loss of Rs 66 crore in Q4 FY20.

Escorts announced its Q4 FY21 results. Revenue from operations increased 60.8% y/y to Rs 2,229 crore. PAT surged 122% to Rs 285 crore. EBITDA margin improved 230bps to 15.4%

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Weekly Big Picture : Metal and Auto Stocks Most Affected.

Weekly Action

Nifty, -0.9%; Sensex, -0.3%; Nifty Midcap, -6.9%; Nifty Smallcap, -7.9%; Model Portfolio, 0%.

Market Pulse : Rally Attempt

Weekly Market Review

Nifty, after a gap-up opening, gave up its gains to close flat for the day. The index advanced for the fourth consecutive day. However, due to massive fall on Monday (-12.9%), Nifty declined around 1% for the week.

Barring Nifty IT (+2.1%), all the sectoral indices closed in negative territory for the week. Nifty Metal (-8.3%) and Auto (-8.1%) declined the most.

Continue reading “Weekly Big Picture : Metal and Auto Stocks Most Affected.”

Weekly Big Picture : Financial Stocks Most Affected; follow these share market tips to stay safe

Weekly Action

Nifty, -12.2%; Sensex, -12.3%; Nifty Midcap, -13.5%; Nifty Smallcap, -17.9%; Model Portfolio, 0%.

Market Pulse “Downtrend”

Weekly Market Review

Nifty snapped its four-day losing streak to close in positive today. However, it lost over 12% during the week, and at a three-year low. Nifty Midcap (-13.5%) and Smallcap (-17.9%) declined with the market. Financial stocks were the most impacted as the index lost as much as 20% during the week.

Continue reading “Weekly Big Picture : Financial Stocks Most Affected; follow these share market tips to stay safe”