Market status: Confirmed Uptrend Confirmed Uptrend

Distribution Day: Two

Global stock markets: Dow30, -0.5%; S&P500, -0.2%; Nasdaq, +0.5%; Nikkei, -0.3%; Kospi, -0.8%; Hang Seng, -0.5%

Nifty opened relatively flat yesterday morning but gained momentum as the day wore on. It was the third consecutive day when Nifty made a new high. Midcap and Smallcap indices continued to rally and outperformed benchmark indices. On the sectoral front, all major indices closed in the green. Nifty IT, Pharma, and PSU Banks closed 1.5–2.0% higher. Also, gain in Nifty IT, Bank, and Financial Services pushed the market higher. Market breadth was skewed toward advancers. Out of 2,239 stocks traded, 1,382 stocks advanced, 521 declined, and the remaining stocks unchanged. Nifty is trading 4.0%, 9.3%, and 24.0% above its 21-, 50-, and 200-DMA, respectively.

We maintain a positive view of the overall market as indices trend into new highs with low distribution day count. Further, leadership remains widespread across multiple sectors. We continue to recommend a selective approach to increase risk. Focus on high-quality ideas emerging from sound bases with an RS line at or near a new high. After a strong rally, pullback/consolidation (if any) is a constructive sign if Nifty holds its short-term moving averages. On the flip side, tracking distribution days is crucial. Accumulation of distribution days can be a sign of market top and halt the uptrend.

Key News

According to Chinese customs data, India’s imports from China decreased by 13% to $59B from January to November 2020. Exports increased 16% to $16B in the same period.

Canara Bank (Nse)Canara Bank (Nse) fixed a floor price of Rs 103.5 per share for its Qualified Institutional Placement to raise up to Rs 2,000 crore.

Coffee Day appointed founder and former chairman V.G. Siddhartha’s wife as its new CEO on Monday.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 92%; Rally Attempt, 0%; Uptrend Under Pressure, 8%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.

Buy watchlist: Heidelbergcement Indialink text, Polyplex, Subros, Berger Paints India, Polycab India, Balaji Amines Limited, Icici Lombard General Ins Co, Balrampur Chini Mls(Nse), Coromandel International, Tata Consumer Products, and Whirlpool Of India (Nse)Whirlpool Of India

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