Market Pulse: Confirmed Uptrend

Distribution Day Count: One

Nifty started the session on a positive note and remained in positive territory throughout the trading session. However, after making an all-time high of 17,438 in the morning session, the index continued to trade lower. Despite some profit bookings at higher levels, the index closed higher with mild gains. Of the Nifty50 stocks, 64% advanced, led by Indusind Bank (Nse) (+4.0%) and Hcl Technologies (Nse) (+2.5%).

There was a mixed reaction on the sectoral front. However, most sectors ended on a positive front. Nifty Media surged 14.4% as its high weightage stock Zee Entertainment Ents. was up 40%. Nifty Auto and Nifty IT rose 0.9% each and led the sectoral gains. On the flip side, Nifty Metal and Nifty FMCG remained laggards through the day, losing 0.5% and 0.3%, respectively. The advance-decline ratio was in favor of advancers. Of 2,023 stocks traded, 1,181 stocks advanced, 765 stocks declined, and the remaining closed flat.
The distribution day count currently stands at one. Further, Nifty is now trading near its all-time high, above all its key moving averages. We would like the index to continue this trend. After such a sudden rally, one must also be prepared for some mild profit booking. In the process, if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

Key News

WPI Inflation surged to 11.39% in August on account of the hardening of minerals and non-food articles. In July, WPI inflation stood at 11.16%.

Mtar Technologies has secured an order worth Rs. 220 crore from U.S.-based Bloom Energy. The order is to be delivered over four quarters to Yuma Hot Boxes.

Hcl Technologies (Nse) has signed a pact with HANCOM Inc. to share advanced software technology solutions and for overseas expansion. The pact will allow HCLTECH to do business in the South Korean market.

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