Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

After opening with slightly positive bias, Nifty turned negative briefly in the first 20 minutes of the session. Investors used the dip as a buying opportunity as the index rallied more than 200 points from the day’s low of 16,915. In the process, Nifty crossed 17,000 for the first time; the momentum continued as the day progressed. In just 19 trading sessions, the index advanced from 16,000 to 17,000, a new record. The broader market indices, Nifty Midcap and Smallcap advanced 0.6% and 0.7%, respectively, slightly underperforming the major index.

On the sectoral front, barring Nifty Media (-0.1%), all sectors gained for the day. Nifty Metal (+1.5%) led the gains, followed by IT (+1.4%) and Fin Service (+1.3%). The advance-decline ratio was in favor of decliners. Of 1,984 stocks traded, 950 stocks advanced, 964 stocks declined, and the remaining closed flat.

The distribution day count now stands at three after one expired last week. Two more distribution days are set to expire this week. Further, Nifty is now trading near its all-time high and is placed above all its key moving averages. We would like the index to continue this trend. After such a sudden rally, one must also be well prepared for a mild profit booking as well. 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

Shilpa Medicare Limited received an approval from DGCI for 2-Deoxy2-Glucose bulk & oral powder.

HFCL will consider a fund-raising proposal on September 3.

Dr. Reddy’s Laboratories launched Chlordiazepoxide Hydrochloride and Clidinium Bromide Capsules USP, 5 mg/2.5 mg, a therapeutic equivalent generic version of Librax, which is approved by the U.S. FDA.

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