Market Pulse: Confirmed Uptrend
Distribution Day Count: Nifty50 - Three Nifty Midcap100 - Four Nifty Smallcap100 - Five
Global stock markets: Dow 30, -0.2%; Nasdaq, +0.1%; S&P 500, +0.1%; Nikkei, -0.8%; Kospi, -0.7%; Shanghai Composite, -1.0%.
Nifty opened at a new all-time high on Wednesday and made a high of 16,700 in the opening hour. However, it failed to hold its gains and staged a downside reversal of around 150 points. The loss was more than 0.2%, but it is not considered a distribution day as volume was low. There was mixed action in the broader market. On the sectoral front, only Nifty FMCG (+0.6%) and Pharma (+0.2%) closed higher. Nifty Bank and Metal fell around 1% and dragged the index lower. The advance-decline ratio continued to favor decliners. Of 2,004 stocks traded, 652 stocks advanced, 1,306 stocks declined, and the remaining closed flat.
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. Shakeouts happen and are a normal course for growth stocks. But we do not want weak action to persist. We recommend being selective when investing in new stock.
Key News
Kennametal India announced its Q1 FY22 results. Revenue increased 121.6% y/y to Rs 211.9 crore. It reported a profit of Rs 21.6 crore compared to a loss of Rs 9.5 crore in Q1 FY21.
Zomato has acquired 9.16% shareholding in Grofers India for Rs 518.21 crore and 8.94% in Hands-on Trades for Rs 222.83 crore.
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