Global stock markets: Dow 30, -1.3%; S&P, -1.4%; Nasdaq, -1.9%; Nikkei, -0.2%; Kospi, +0.3%; Hang Seng, +0.6%

Yesterday, Nifty gapped up for the third consecutive session. It traded in a narrow range of just 50 points until the last hour of sharp rally. Around 70% of Nifty50 stocks closed in the green. Nifty is just 140 points below its previous rally high of 11,794. On the sectoral front, the majority of sectoral indices advanced. Nifty Financial Service (+3.2%) advanced the most, followed by Nifty Realty and Pvt Bank, which advanced 2.6% and 2.3%, respectively. On the flip side, Nifty Metal (-0.7%), FMCG (-0.2%), and Pharma (-0.1%) were the decliners. FIIs’ net buying was Rs 1,101 crore, while DIIs’ net selling was Rs 934 crore.

Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. (A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day). Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.

Key News

Tata Consultancy Svs. will report Q2 FY21 results. The company will also consider buyback of shares.

The government has appointed Dinesh Khara as the new Chairman of State Bank Of India for a period of three years.

Reliance Industries: Abu Dhabi Investment Authority will invest Rs 5,512.50 crore into Reliance Retail.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 15%; Rally Attempt, 10%; Uptrend Under Pressure, 50%; Downtrend, 25%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 20%; Rally Attempt, 5%; Uptrend Under Pressure, 65%; Downtrend, 10%.

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