Market Pulse: Confirmed Uptrend

Distribution Day Count: Two

Global stock markets: Dow 30, +0.7%; Nasdaq, +1%; S&P 500, +1%; Nikkei,+1.4%, Kospi, -0.3%; Shanghai Composite, -1.6%

Last week, Nifty started on a weak note as it breached its 21-DMA, but the index found support near its 50-DMA. It then staged an upside reversal as it retook its 21-DMA on Thursday. There was a mixed reaction on the sectoral front. Nifty IT (+1.7%) was the top gainer, followed by Nifty Realty (+0.9%) and FMCG (+0.8%). On the flip side, Nifty Media, Auto, Pvt Bank, and Bank declined 2–2.6%. Month-to-date in July, FIIs were net sellers with Rs 12,360 crore, while DIIs were net buyers worth Rs 10,187 crore.

Nifty has been hovering around its 21-DMA for the last two months and reclaimed the level this week. It is crucial for the index to hold and trade above this level. Two distribution days expired last week, bringing the count down to two. On the flip side, if the index falls further and adds a couple of distribution days, 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.

Companies Announcing Results Today: Axis Bank, Kotak Mahindra Bank(Nse), Larsen & Toubro, Tata Motors, and others.

Key News

Reliance Industries’s Q1 FY22 PAT and margin beat estimates, while revenue missed estimates. Jio added 440.6M new subscribers during the quarter. Average revenue per user was Rs 138.4 compared with Rs 138.20 q/q.

Itc’s Q1 FY22 PAT grew 28.6% y/y to Rs 3,013.5 crore. Revenue advanced 36% y/y to Rs 12,959 crore. ITC’s cigarette business grew 32.9% y/y to Rs 5,122.19 crore and its EBIT jumped 36.7% to Rs 3,220 crore.

-Mirabai Chanu won the silver medal in weightlifting in the women’s 49 kg category on Day 1 of the Tokyo Olympics. We congratulate her on her achievement and wish other athletes of team India good luck.

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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.