Daily Big Picture – Distribution Sets In As Nifty Faces Resistance At 50-DMA

Today’s Action:

India’s key indices turn weak, as they face stiff resistance at their 50-day lines.

Daily Market Review:

After a promising start to the week, today’s session turned out to be a damper for the market.

Stock market optimists had nothing to cheer about, as early-session gains turned into a 0.3% loss for both the key indices.

While strong global cues raised hopes for a second-straight positive session, PNB’s uncovering of additional fraudulent transactions worth Rs. 1,300 cr jolted the domestic market sentiment.

Broader indices fell behind once again, as Nifty Midcap and Nifty Smallcap retreated 0.9% and 0.3%, respectively.

On the sector front,  the PSU Bank stocks came under immense pressure, sending the sector index lower by 3.5%. Nifty Realty pulled back by 1.7% after yesterday’s strong gain. On the up side, the FMCG and IT indices managed to post small gains.

The IND 47 index, which is a list of top 47 stocks in chart and fundamental characteristics, fell in line with the key indices, losing 0.3% today.

The advance-decline ratio turned in favour of losers today. On the NSE, 513 stocks advanced while 1041 declined. A total of 55 stocks remained unaffected by today’s movement.

One stock that paid no heed to overall weakness in the market was Avenue Supermarts. The stock had broken out recently and it continued to trend higher, hitting a new high in the process.

Coming to the market direction, today’s action has raised doubts about the Indian market strength once again. With both the key indices falling around 0.3% and volumes coming in higher compared to Monday’s session, today qualified as a distribution day.

The distribution day count has now inched higher to five and six on the Nifty and Sensex, respectively, keeping the Indian market in an {Uptrend Under Pressure}. As a result, we continue to remain a bit cautious in our stance.

Current Outlook:

– Be cautious with any new purchases

– Form a defensive game plan for your portfolio

– Stay disciplined and exercise sound sell rules

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