Today’s Action:
Key indices score decent gains; broader market outperforms.
Daily Market Review:
Frontline composites had a decent outing as the Nifty and the Sensex logged gains of 0.5% and 0.6%, respectively. Led by pharma stocks, Nifty reclaimed the important level of 10,800 and closed at a four month-high.
The broader market continued its good run, with the Nifty Midcap and Smallcap indices advancing 0.9% and 0.7%, respectively.
Stock market optimists finally had a political development going their way as the U.S.-North Korea historic meet turned out to be fruitful, with North Korea agreeing to denuclearization.
The focus will now move towards the domestic inflation data to be announced today and the Federal Reserve’s two-day meet starting today.
Coming back to the day’s action, the overall market breadth remained healthy, as the ratio of gainers and losers stood at 4:3 on the NSE.
On the sectoral front, all sector indices ended in the green, barring Nifty Metal (-0.4%). The top gainers were Nifty Pharma (+2.6%), PSU Bank (+2.3%), and FMCG (+0.9%).
Our proprietary list of leading stocks, the MarketSmith India IND 47 index gained 1.1% and outperformed the overall market once again.
With the Nifty yet to clear its previous rally high of 10,929, the Indian market condition remains unchanged at an Uptrend Under Pressure. While both key indices are only 2-3% away from their all-time highs, we would like to wait for further confirmation. The distribution day count stands at two on the Nifty and three on the Sensex. For the Nifty, 10,930 level serves as a major resistance. On the downside, the 10,550 serves as a crucial support level.
The broader market indices seem to have bottomed out, but we would like to wait for a follow-through day for confirmation. Both Nifty Midcap and Smallcap are currently in a Rally Attempt. The midcap and smallcap benchmarks have high overhead resistance and are trading 13% and 20% below their January highs.
Current Outlook:
– Be cautious with new purchases.
– Form a defensive game plan for your portfolio.
– Stay disciplined and exercise sound sell rules.
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