Daily Big Picture – Key Composites Break Free from Losing Streak


Today’s action:

The major stock indices posted significant gains after declining in the last three sessions. The Nifty Midcap index and Smallcap indices score all-time highs.

Current Outlook:

●      Market environment conducive for new purchases, but remain selective

●      Focus on fundamentally strong stocks breaking out of sound base patterns

●      Stay disciplined and exercise sound buy and sell rules 

The benchmark indices put an end to a three-day losing streak by closing in the positive quadrant. After opening the session marginally higher, both the indices trended upwards to close near the day’s high. Despite weak global cues, markets delivered a good performance today, covering up most of the gap from their all-time highs.

By the close of markets, the Nifty added 0.61% (+55.55 points) and closed at 9,237.00. The index traded in the range of 9,172.85 – 9,242.70.

The Sensex staged a solid comeback by gaining 0.72% (+212.61 points) and closed at 29,788.35. The day’s range was observed at 29,570.58 – 29,804.51.

Trading activity improved in today’s session in comparison to the past few days. The major indices witnessed higher volume than yesterday. High upside volume is a positive aspect for markets, as it signifies greater accumulation than distribution.

Upward momentum in the broader markets is greater than the trend observed in frontline composites. Today, the Nifty Midcap and Smallcap indices achieved a fresh all-time high by gaining 1.30% and 0.99%, respectively.

In today’s session, the William O’Neil IND 47 Index, which lists the top 47 stocks in chart and fundamentals, maintained the positive momentum by recording a gain of 0.61%, in line with the benchmark indices.

Looking at the sector-wise performance, banking and financial stocks outperformed other sectors. Nifty PSU Bank, Financial Services, Bank and Pvt Bank indices posted solid gains to lift the markets. Nifty FMCG and Realty indices did equally well in today’s session. The only sector indices on the negative end were Nifty Media and Metal.

Going forward market direction will be steered by the upcoming earnings season. Good results will help markets in scaling greater highs and extend their gains. Investor focus in the next few weeks will be inclined towards the earnings updates. High volume action on individual stocks will be more evident at the bourses.

The current distribution day count of 4.0 on each key index is slightly concerning. Ideally, with such a high count, the markets should be on the verge of moving into Under Pressure. However, the Indian markets have recovered strongly after the distribution days to make-up for the losses. As a result, the Sensex and the Nifty have traded close to their highs. They are currently trading less than 1% off highs. The current market condition remains strong in a Confirmed Uptrend.

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