Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Global stock markets: Dow 30, -0.3%; Nasdaq, -0.4%; S&P 500, -0.4%; Kospi, -0.4%; Nikkei, -0.3%; Shanghai Composite, -0.9%

Yesterday, Nifty gained about 100 points at the opening, taking cues from global markets. The index consolidated its gains and traded in a narrow range to close near the day’s high. In the process, Nifty reclaimed its 21-DMA. Volume was higher compared to that in the previous session. In the broader market, the Smallcap index outperformed, while Midcap underperformed for the day.

On the sectoral front, among major sectors, barring Nifty FMCG (-0.2%) and Nifty IT (-0.3%), all closed in the green. Nifty Fin Service (+1.5%) was the day’s highest gainer followed by Nifty Bank and Nifty PVT Bank , which advanced 1.4% each. The advance-decline ratio was in favor of advancers. Out of 2,317 stocks traded, 1,053 stocks advanced, 885 stocks declined, and the remaining closed flat.

Nifty has reclaimed its 21-DMA. It is crucial for the index to hold and trade above this level. On the flip side, the distribution day count is currently at four. If the index falls further and adds a distribution day, we may change the market status to an Uptrend Under Pressure. We continue to recommend a selective approach to increasing risk. Focus on quality ideas emerging out of sound bases with RS line at or near new highs while reducing exposure to stocks breaking below key support levels.

Key News

Tata Metaliks (Nse) announced Q1 FY22 results. Revenue surged 187% y/y to Rs 602.9 crore. It reported a profit of Rs 94.7 crore compared to a loss of Rs 12.3 crore in Q1 FY21.

Adani Enterprises (Nse) has taken over the management of Mumbai International Airport from the GVK Group.

Buy Watchlist: Indian Energy Exchange, Oracle Finl.Svs.Sftw., Schaeffler India, Orient Electric, State Bank Of India, Colgate-Palmolive India, Sharda Cropchem, Berger Paints India, Icici Bank, Tata Power, Ratnamani Metals & Tubes, Minda Industries, Lumax Auto Technologies, Jk Cement, Pnc Infratech, L&T Technology Services, Hcl Technologies (Nse).

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Author's Bio: 

Marketsmith India, One stop solution for all your Stock Market needs. Get stock market ideas and stock predictions all at one place. A proprietary tool by William O'Neil India following the CANSLIM method of investing.