Market Pulse: Confirmed Uptrend

Distribution Day Count: Four

Global stock markets: Dow 30, +0.3%; Nasdaq, +0.1%; S&P 500, +0.3%; Kospi, -0.5%; Nikkei, -0.5%; Shanghai Composite, -0.3%

Yesterday, Nifty opened flat and hit the day’s low in the first hour of trading. However, it gradually recovered from there to close near the day’s high, retaining decent gains. Volume was lower than in the previous session. The broader market outperformed benchmark indices. The Midcap and Smallcap indices were up 0.7% and 0.6%, respectively.

On the sectoral front, barring Nifty Auto (-0.1%) and Media (-0.2%), all indices closed in the green. Nifty Metal (+2.2%) was the top gainer, while Nifty Realty and Finservice gained around 2.0% and 0.6%, respectively. The advance-decline ratio was in favor of advancers Out of 2,263 stocks traded, 1,066 stocks advanced, 861 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 days, 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

Bajaj Healthcare Ltd received license from DRDO to manufacture and market '2-Deoxy-D-Glucose' (2-DG), used in control and treatment of COVID-19.

Railtel Corporation Of India received an order worth Rs 23.4 crore from Sagar Cable Networks to provide multicast drop and carry with 1.5G capacity at 66 locations for a period of five years.

REC raised $400M by issuing bonds, the proceeds of which will be used to lend to the power sector.

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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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.