Today’s Action:
Benchmark extends losses with lower volume. Distribution count remains same.
Daily Market Review:
For the third consecutive day, the Indian market ended in a negative territory. Benchmark indices opened on a negative note, amid weak global cues, and continued to be sluggish. Further, the data on India’s trade deficit also hurted the investor sentiments. The India’s trade deficit came at a three-year high of $14.01B in October, from $8.98B in September 2017.
The Nifty started the day on a negative note at 10,171.95 and lost 0.67% to end at 10,118.05. The trading range for the Nifty was 10,094.00-10,175.45. Similarly, the BSE Sensex ended the day on a negative note and deflated 0.55% to close at 32,760.44. The trading range was observed to be 32,683.59-32,944.94.
The broader indices underperformed the benchmark indices, with both the Nifty Midcap and the Smallcap falling 1.09% and 1.88%, respectively.
The market breadth, which indicates the overall health of the market, was weak. On the NSE, 1,250 stocks declined and 303 stocks advanced. A total of 27 stocks remain unchanged.
Today, all the sectoral indices closed in the red, with the Nifty Metal index tumbling at 2.96% as prices of the industrial metals declined in global commodities market. Nifty Pharma (-1.99%) and Realty (-1.80%) were the next weak indices.
The MarketSmith IND 47 Index, our proprietary lists of the top 47 stocks in technical chart and fundamental chart, lost 2.37% today.
In other news, shares of Sun Pharmaceutical Industries were down 4.48% intraday to INR 502.50. The Company reported its Q2 FY 2018 results on Tuesday, after market hours. Its net sales was down 15% to INR 6,590 crore in Q2 FY 2018, and its consolidated net profit fell 59.5% to INR 1,001.79 crore. As per management, challenging the US generic pricing environment impacted Q2 performance. The results were also important for knowing the status of Halol facility in Gujarat. However, the US Food and Drug Administration (FDA) is taking its own time, and is yet to conduct a re-inspection.
On a positive note, today’s trading volume at the bourses came slightly lower than its previous trading session. The distribution count remains unchanged to four on the Nifty and two on Sensex. However, the Nifty has breached its 50-DMA while Sensex is still trading above its all moving average. Since, the distribution count is low,Indian market remains in Confirmed Uptrend. However, further weakness in them would force us to shift the market status to Uptrend Under Pressure.
So, what should be your approach in the current market?
The current status of ‘’Confirmed Uptrend’’ is an excellent time to channel resources in the equity market. However, when the market is trading weak close to its moving average with high number of distribution days, investors should stick to a defensive game plan and wait for the right time to buy stocks. Averaging down your trades will not be a good idea, as nobody knows where the market bottoms.
As a result, investors should remain disciplined and follow sound sell rules. Booking profits at regular intervals and minimizing losses will be the right strategy to approach this market.
Leaders Up on Volume: {MINDAIND} (+0.16%), {MOTILALOFS} (+0.39%)
Leaders Down on Volume {532762} (-7.98%), {AVANTIFEED} (-7.15%), JSLHISAR(-4.48%)
Current Outlook:
– Market environment conducive for new purchases, but remain selective.
– Focus on fundamentally strong stocks breaking out of strong technical patterns.
– Stay disciplined and exercise sound buy and sell rules.
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