Market Pulse: Confirmed Uptrend

Distribution Day Count: Nifty50 - Three Nifty Midcap100 - Four Nifty Smallcap100 - Five

Global stock markets: Dow 30, -0.8%; Nasdaq, -0.9%; S&P 500, -0.7%; Nikkei, +0.7%; Kospi, +0.7%; Shanghai Composite, +0.4%.

Nifty opened on a weaker note yesterday but quickly gained more than 50 points from its opening low. However, it failed to hold the gains and made a low of around 16,495. The market was on the backfoot for a while, resembling Team India’s situation against England at the end of day four at Lord’s. But like day five of the test match, when Team India bounced back and recorded a historic win, Nifty recovered from the lows and made a new high in the second half. There was mixed action in the broader market. On the sectoral front, Nifty IT (+2.6%) and FMCG (+1.4%) were the top gainers. On the flip side, Nifty Metal closed 2.3% lower. FII net selling was Rs 343 crore, while DII net buying was Rs 266 crore.

Currently, the distribution day count stands at three. Nifty is trading near its all-time high. 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. Over the last few sessions, the broader market seems to have fallen out of favor. Some stocks are showing poor price behavior, resulting in minor damage to their charts. While shakeouts happen and are a normal course for growth stocks, persistent weak action is a cause for concern. We recommend being selective when investing in new stock.

Key News

Bharat Dynamics and MBDA signed an agreement to establish an Advanced Short Range Air-to-Air Missile facility in India.

Hcl Technologies (Nse) signed a five-year, end-to-end IT transformation services deal with Wacker Chemie AG, a German multinational chemical company, to establish a modernized digital workplace and improve its quality-of-service delivery.

Dilip Buildcon’s arm gets financial closure for Rs 880 crore road project from NHAI.

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