Tag: distribution day

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SGX Nifty Indicates Flat Opening; Shriram Transport Finance to Raise Funds

At 8:00 am IST, SGX Nifty Futures was trading at 15,764, compared with Nifty’s close of 15,751, yesterday.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Global stock markets: Dow30, -0.4%; S&P 500, -0.1%; Nasdaq, +0.5%; Kospi, +0.3%; Nikkei, -0.1%

Yesterday, Nifty opened higher but was volatile in the first hour. It gained strength as the day progressed and made a new all-time high. Nifty held gains and closed in the top quartile of the day’s range. Volume was comparatively low. The broader market outperformed. Stocks related to utilities and food and beverages were among the top gainers in midcap and smallcap categories. On the sectoral front, there was a mixed action. Nifty Financial Services, Metal, and Pharma closed 0.2–0.4% lower. On the flip side, Nifty IT, FMCG, and Auto closed 0.4–1.0% higher. Nifty50 is trading around 3.5% and 6.0% above its 21- and 50-DMA, respectively. FIIs were net sellers at Rs 186 crore, while DIIs were net buyers at Rs 983 crore.

Nifty making a new high, the broader market back in momentum, distribution day count down to two, and no distribution day after May 11 are positive signs for a sustainable rally. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News:

Shriram Tran.Fin launched QIP worth Rs 2,000 crore. Floor price set at Rs 1,433 per share.

Union Bank of India ’s PAT beat estimates, while NII was below estimates. PAT grew 83% q/q to Rs 1,329 crore. NII declined 18% q/q to Rs 5,402 crore. The bank plans to transfer Rs 7,800 crore of NPAs to national ARC in phase 1.

Icici Prudential Life Insurance announced an annual bonus of Rs 867 crore for all eligible participating policyholders for FY21.

Buy Watchlist: Nippon Life India Asset Management, Bajaj Finance, Sbi Cards And Payment Services,  Ambuja Cements, Eveready Inds.(India), Varun Beverages, Colgate-Palmolive India, Sharda Cropchem, Astral, Berger Paints India, Icici Bank,  Cholamandalam Inv.& Fin., Tata Power, and Apollo Hosps.Enterprise

Sell Watchlist: Advanced Enzyme Techs.

Yesterday, we added Radico Khaitan  and  Action Construction Equ to our portfolio. ACE is still trading in its ideal buy zone.

Recent articles:

Marketsmith India Daily Updates: Top 20 Stocks Down In Price Today.

Marketsmith India Daily Updates: Top 20 Stocks Up In Price Today.

Marketsmith India Daily Updates: Activity Near The Key Moving Averages.

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Nifty Scales Fresh High; Broader Market Outperforms

Today’s Action

Nifty, +0.5%; Sensex, +0.4%; Nifty Midcap, +1.2%; Nifty Smallcap, +1.6%; Model Portfolio, +1.6%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Nifty, after opening higher, was volatile in the first hour. It gained strength as the day progressed and made a new all-time high. Nifty was able to hold gains and closed in the top quartile of the day’s range. Volume was comparatively low. The broader market outperformed. Stocks related to utilities, food and beverages were among the top gainers in the midcap and smallcap categories.

On the sectoral front, there was mixed action. Nifty Financial Services, Metal, and Pharma closed 0.2-0.4% lower.  On the flip side, Nifty IT, FMCG, and Auto closed 0.4-1% higher. Nifty50 is trading around 3.5% and 6% above its 21-and 50-DMA, respectively. The advance-decline ratio was in favor of advancers, as out of 2,300 stocks traded, 1,380 stocks advanced, 610 stocks declined, and the remaining closed flat.

NIF

Nifty making a new high, the broader market back in momentum, distribution day count down to two, and no distribution day after May 11 are positive signs for a sustainable rally. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News

Lupin (Nse) received U.S. FDA approval for its Emtricitabine and Tenofovir Disoproxil Fumarate tablets, used for pre-exposure prophylaxis (PrEP) to reduce the risk of HIV-1 infection.

Mrf’s Q4 FY21 PAT fell 51.1% to Rs 332.15 crore. Revenue grew 31% y/y to Rs 4,816 crore. Margin expanded 8bps y/y to 15.91%.

Indian Energy Exchange traded 6,540 MU of electricity in May. Volume grew 9% y/y. Green Market traded its highest-ever monthly volume of 357 MU (92% m/m growth).

Recent Articles:

Portfolio Advances 1.6% Against Nifty’s Gain of 0.5%

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Adding Another Stock

Is Radico Khaitan A Good Buy ??

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How To Spot Stock Market Tops

​​​​We all know the importance of market status in determining an investor’s stance in the CANSLIM style. It not only helps you realize gains by being aggressive when the risk is minimal but also protects you from unwarranted risks of markets.

When the market is in a Confirmed Uptrend, it is the best time to make the most of your gains. This is when most breakouts are successful, and hence an investor carefully following the patterns of his/her stocks makes big gains. But how can you pre-empt a probable weakness in the market so that one can lock-in gains and play defensive with less or no exposure? A distribution day can provide a systematic and credible approach to do that.

What is a Distribution Day?

A distribution day is when a market representative index (for example, Nifty50) loses more than 0.2% in a day, with volume higher than that of the previous session. When a distribution day occurs, it hints that big institutional investors are exiting or reducing their positions in the market. Institutional activity is what moves any market, especially in India where retail participation is small. Though a distribution day hints at institutions liquidating their positions, it loses its impact after 25 trading sessions. 

How Does it Help in Sensing Market Weakness?

An investor should keep count of all valid distribution days during a Confirmed Uptrend. Successive distribution days imply a weakening market. But what threshold of distribution day count is enough to say the market is under pressure? A distribution day count of 2–3 is benign and usually normal in a Confirmed Uptrend. But when the count increases to 5–6, one should prepare to get his/her positions trimmed.

William O’Neil wrote in “How To Make Money In Stocks,” “After four or five days of definite distribution over any span of four or five weeks, the general market will almost always turn down.” When this happens, carefully assess each stock in your portfolio and reduce your exposure accordingly. And in some cases, it’s wise to get out completely. Market rallies do not go on forever. At some point, they will end. This usually happens when the market gets smacked with a heavy load of distribution days.

Understanding Distribution Day

The below example is for understanding. Do not relate it with current market. Currently we are in a Confirmed Uptrend. Distribution Day count is three

Related articles:

Webinar on How to Spot Market Tops? 

Still the No. 1  Stock Market Tip: Always Cut Your Losses Short

Also read our last week article:

Break the Stereotype; Buy High, Sell Higher

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SGX Nifty Indicates Higher Opening; MRF and Jubilant Ingrevia to Report Results Today

At 8:00 am IST, SGX Nifty Futures was trading at 15,753, compared with Nifty’s Friday close of 15,670.

Market Pulse: Confirmed Uptrend


Distribution Day Count: Three

Global stock markets: Dow30, +0.5%; S&P 500, +0.9%; Nasdaq, +1.5%; Kospi, -0.2%; Nikkei, +0.2%; Shanghai Composite, +0.1%

On Friday, Nifty opened on a flat note but hit a new all-time high of 15,733. Nifty Midcap (+0.7%) and Smallcap (+0.4%) outperformed the major index. 50% of Nifty50 stocks closed higher led by Tata Motors (+3.4%) and Grasim Industries (+3.3%). On the sectoral front, Nifty Metal (+1.4%) was the top gainer, followed by Nifty Media (+1%)

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Nifty continues to make fresh highs and is currently trading 3.3% and 5.6% above its 21- and 50-DMA, respectively. We would like the index to hold its 21-DMA and/or 50-DMA and trade above that. Without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key Results Today: Fairchem Organics, Mrf,  Jubilant Ingrevia , and others.

Key News:

Foods & Inns reported its Q4 FY21 results. PAT was up 61.1% y/y to Rs 4.64 crore. Revenue surged 17.5% y/y to Rs 162.7 crore.

IFGL Refractories reported its Q4 FY21 results. Revenue grew 27% y/y to Rs 283.5 crore. The company posted a loss of Rs 2.53 crore as compared to loss of Rs 13.93 crore for the same period last year.

RBL Bank received the RBI’s approval to reappoint Vishwavir Ahuja as the Managing Director & CEO of the bank for one year, effective June 30.

Buy Watchlist: Nippon Life India Asset Management ,  Bhansali Engr. (Nse), Bajaj Finance, Sbi Cards And Payment Services, Ion Exchange India, Page Industries, Action Construction Equ., State Bank Of India, Ambuja Cements, Eveready Inds.(India), Varun Beverages, Colgate-Palmolive India, Sharda Cropchem, Astral, Berger Paints India, Icici Bank, Ramkrishna Forgings, Gujarat State Petronet, Apollo Hosps.Enterprise,  and Apollo Tricoat Tubes

Sell Watchlist: Advanced Enzyme Techs.

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Nifty Ends Higher For Third Consecutive Week; Realty and Metal Stocks Rally

Weekly Action

Nifty, +1.5%; Sensex, +1.3%; Nifty Midcap, +3.3%; Nifty Smallcap, +2.4%; Model Portfolio, +2.4%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Weekly Market Review

Nifty continued to trend higher for the third consecutive week. Daily trading volume has stayed below 50-day average volume throughout the week. Today, it opened on a flat note but hit a new all-time high of 15,733. Nifty Midcap (+0.7%) and Smallcap (+0.4%) outperformed the major index. 50% of Nifty50 stocks closed higher led by Tata Motors (+3.4%) and Grasim Industries(+3.3%).

Barring Nifty IT (-0.5%), all sectors closed in the green. Nifty Realty (+6.7%) was the top gainer for the week, followed by Nifty Metal (+5.6%). Today, the advance-decline ratio was in favor of advancers. Of the 2,254 stocks traded, 1,118 advanced, 799 declined, and the rest remained unchanged.

Nifty making a new high, the broader market back in momentum, and no distribution day after May 11 are positive signs for a sustainable rally. Declining average daily trading volume is not a good sign. However, without trying to predict and decode stories, we will take what the market gives and continue to monitor unfolding conditions. If the index falls further, adds a distribution day, and breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News

Niit (Nse)  announced its Q4 FY21 results. Consolidated revenue grew 30.5% y/y to Rs 275.5 crore. It reported a profit of Rs 46.5 crore compared to a profit of Rs 0.6 crore in Q4 FY20.

Bank of India  announced its Q4 FY21 results. NII decreased 22.6% y/y to Rs 2,936 crore. It reported a profit of Rs 250.2 crore compared to a loss of Rs 3,571 crore in Q4 FY20.

Bharat Forge  announced its Q4 FY21 results. Revenue increased 48.4% y/y to Rs 1,307 crore. It reported a profit of Rs 205.4 crore compared to a loss of Rs 73.3 crore in Q4 FY20.

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