Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Global stock markets: U.S. markets were closed on Monday; Kospi, +0.5%; Nikkei, +0.4%; Shanghai Composite, -0.2%

Yesterday, Nifty opened 70 points higher and continued to move higher as the day wore on. It was constructive as the index closed strong and reclaimed its 21-DMA. However, it should be noted that volume was low. The broader market had mixed action. On the sectoral front, barring Nifty IT that closed flat, all other indices closed in the green. Nifty Realty (+2.5%) was the top gainer, followed by more than 1% gain in Nifty Bank, Financial Services, and Metals. The advance-decline ratio was in favor of advancers. Out of 2,312 stocks traded, 1,320 stocks advanced, 662 stocks declined, and the remaining closed flat.

The distribution day count is currently elevated to four. If the index falls further, adds a couple of distribution day, and breaches its key moving averages, 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

Nmdc proposed to sell 4% of total paid-up equity via offer for sale and in case of oversubscription an option to sell additional 3.49%.

Maruti Suzuki India produced 1.65 lakh units in June compared with 50k units in June 2020.

Yes Bank’s loans and advances declined 0.4% y/y to Rs 1.63T. Deposits increased 39.1% y/y by the end of June to Rs 1.63T.

Buy Watchlist: Aavas Financiers, Schaeffler India, Orient Electric, Indo Count Inds., Sbi Cards And Payment Services, State Bank Of India, Colgate-Palmolive India, Sharda Cropchem, Berger Paints India, Icici Bank, Cholamandalam Inv.& Fin., Tata Power, Ratnamani Metals & Tubes, Minda Industries, and Apollo Hosps.Enterprise, L&T Technology Services, Hcl Technologies (Nse).

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