-Today, the Nifty added a distribution day. Currently, the total count stands at four on the Nifty as well as the Sensex.
– Factors such as accumulation of distribution day and the Nifty breaching key support level of 10,560 clubbed with weakness in global markets have led us to downgrade the market to an Uptrend Under Pressure.
-The market status was changed to a Confirmed Uptrend on November 2. The rally lasted for 21 trading sessions. During these 21 days, there was no additional follow-through day recorded.
– Apart from exit polls, weakness in the global market is also weighing the market down badly. Major markets in the world are performing badly due to flattening of US yield curve and concerns over trade wars which might result in a slowdown.
-From here, we will change the status to Correction, if 2-3 more distribution days are added. The status will be back to Confirmed Uptrend if Nifty retakes 10,942 level (high during the recent rally).
– As the market condition has changed to an Uptrend Under Pressure, investors should proceed ahead with caution. Unless a stock shows exceptional fundamental and technical strength, no new addition to the portfolio is advised.
– 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-DMA on above-average volumes should be sold. Consider exiting stocks that have declined 8% from your buy price.