Today’s Action

Nifty, -4%; Sensex, -4.1%; Nifty Midcap, -2%; Nifty Smallcap, -1.5%; Model Portfolio, 0%

Daily Market Review

Market Pulse: Confirmed Uptrend

Nifty staged a downside reversal closing near the lows but on a lower volume. Nifty Bank and IT saw high selling pressure. Yesterday, volume and percentage gains met our threshold. Hence, we considered it as a follow-through day and upgraded the market to a Confirmed Uptrend. However, we didn’t add any stocks to our portfolio and asked investors to be careful if they take any fresh position as follow-through days after such sharp and dramatic correction can fail and more time should be given to the market to prove its strength.

We continue to be very selective about taking any fresh positions. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further. Even when indices suffered heavy losses, the advance-decline ratio was in favor of advancers. Of 2,123 stocks traded, 937 advanced, 822 declined, and the remaining traded flat.

Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. Stocks with higher relative strength and superior fundamentals can do well. Some leading stocks have sharply corrected. Wait for them to put in at least a short period of consolidation and show a constructive breakout from that range. Buying without this period of constructive behavior into a straight upmove off the bottom, puts you at risk of drawdown.

Key News

Nmdc: The company’s FY20 iron ore production slips 1.5% y/y to 31.88 MT versus 32.36 MT in FY19. Sales were down 2.6% y/y at 31.53 MT versus 32.36 MT in FY19.

Icici Bank: The bank reduced its lending rate by 15bps across tenors.

March Auto Sales:

Ashok Leyland: Sales were down 90% y/y to 2,179 units.

Eicher Motors (Nse): Sales were down 83% y/y to 1,499 units.

Maruti Suzuki India: Sales were down 47% y/y to 83,792 units.

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Author's Bio: 

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