Daily Big Picture : Nifty Finds Resistance Near 200-DMA; Axis Bank Down After Quarterly Results

Today’s Action

Nifty, +0.3%; Sensex, +0.2%; Model Portfolio, 0%; Nifty Midcap, +1.4%; Smallcap, +0.4%

Daily Market Review

Market Status: Downtrend 

Nifty opened 50 points lower from yesterday’s close and breached 11,000 mark. But, the index was able to reverse its intraday lows and closed 0.3% higher. On the upside, it found resistance near its 200-DMA. The distribution day count remains at four, and none expiring till next seven sessions. The action in broader market was positive. Nifty Midcap and Smallcap gained 1.4% and 0.4%, respectively. For July, the trading range of Nifty was large, with a high low of 11,981-10,999.

Barring Nifty Media (-0.3%) and Realty (-0.6%), all the sectors closed in the green. Nifty Metal (+2.3%), PSU Bank (+1.7%), and Pharma (+1.3%) were the top gainers. The advance-decline ratio continued to be leaned toward decliners. Out of 2,093 stocks traded on the NSE, 920 declined, 866 advanced, and the rest remained unchanged.

Yesterday, the market status was downgraded to a Downtrend. We recommend that investors trim positions, raising cash if possible, or keep a defensive approach by holding stocks that are resilient in falling market. Today, Nifty breached its yesterday’s low, but closed in positive territory in the upper half of the day’s range. Hence, we will consider today as Day 1 of an attempted rally. Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low for two more sessions. From there on, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend.

Key News

Axis Bank: The stock was down ~4.7% after its Q1 FY20 results were below estimates. Asset quality remained stable in Q1 FY20, but the provisioning and slippages remained higher. Today, the stock opened gap-down and breached its 200-DMA.

Allahabad Bank: The Company approved raising equity capital up to Rs 2,000 crore through qualified institutional placement (QIP). The stock fell 2.8% today.

Apollo Tyres: The Company reported its Q1 FY20 results during market hours. Revenue grew less than 1% y/y to Rs 4,331.3 crore. EBITDA was down 12% y/y at Rs 475 crore. The margin was down 150bps y/y to 11%. The stock was up 5.2%. It is trading below key moving averages and is at three-year low.

What do you think? Please email us any questions or comments.

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