– Today, the market status has been changed to an Uptrend Under Pressure. The distribution day count for the Nifty is at five and is trading below 200-DMA.
– High number of distribution days, Nifty trading below its key support level and weakness in global markets has led us to shift market to Uptrend Under Pressure.
-The market status was upgraded to a Confirmed Uptrend on December 19. The market, since then, has gradually lost momentum and had three consecutive sell-days. Amid global weakness, the Nifty breached its 200-DMA marginally on Friday and it failed to recover today.
– The Nifty is now 10% below its 52-week high. The distribution day count is high and we’ve seen no strong breakouts in leading stocks in the last few trading sessions.
-We will change the status to Correction, if i) 2-3 more distribution day are added and ii) if Nifty further breaches its key support level of 50-DMA. On the other hand, the status will be back to Confirmed Uptrend if Nifty retakes 10,942 level (high during the recent rally)
– As the market status has been changed to an Uptrend Under Pressure, investors should proceed with caution. Unless a stock shows exceptional fundamental and technical strength, it is advised not to make any new additions to the portfolio.
– Investors should consider booking profits in the stocks that have performed well and have advanced 20-25% from their ideal buy points. Even if the market undergoes a small correction, these stocks are more likely to consolidate. Further, stocks slipping below their 50- and 200-DMAs on above-average volumes should be sold. Consider exiting stocks that have declined 8% from your buy price.