Market status: Confirmed Uptrend
Distribution Day: Two
Global stock markets: Dow30, +0.8%; S&P500, +0.9%; Nasdaq, +0.7%; Nikkei, -0.3%; Kospi, -0.6%; Hang Seng, -1.5%
Nifty closed in positive territory on all four sessions of the last week. It made a new high on Friday and closed in the top quartile of the day’s range. Friday’s gain was led by Nifty Bank (+2%). Also, Nifty Metal (+1.2%), Pharma (+1.2%), and FMCG (+1.4%) pushed Nifty higher. Nifty Midcap and Smallcap indices took a breather and underperformed the benchmark indices. Nifty is trading 3.5% and 9.5% above its 21- and 50-DMA, respectively. On the sectoral front, Nifty PSU Bank, Realty, and Metal closed 8–9% higher for the week. Nifty Auto, Energy, and Pharma closed 4–5% higher, while Nifty IT and FMCG also gained 2.5% and 2.0%, 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
India imported 117MT coal during April-October this fiscal, a decline of 19% from the corresponding period last year.
Nhpc said it will commission the 2,000MW Subansiri hydropower project by March 2022. The project has been facing hurdles due to intense protests in Assam.
Maruti Suzuki India production for November increased 5.9% y/y to 1,50,221 units.
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%; RallyAttempt, 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, 92%; RallyAttempt, 0%; Uptrend Under Pressure, 8%; Downtrend, 0%.
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