Today’s Action

Nifty, +1.8%; Sensex, +1.9%; Nifty Midcap, +1.3%; Nifty Smallcap, +0.7%; Model Portfolio, -0.4%

Market Pulse Confirmed Uptrend

Nifty opened slightly in the green. As the day progressed, the buyer demand increased, which resulted in Nifty closing 1.8% higher. The volume was also high across the board. As the percentage gain and volume is above our threshold, today’s session will be marked as an additional follow-through day. Nifty Bank, Financial Services, Metal, and IT gained more than 2%. On the flip side, Nifty Pharma and FMCG closed slightly lower. Of 2,111 stocks traded, 1,121 advanced, 668 declined, and the remaining traded flat.

Our primary indicators remain healthy as the distribution count is zero and leaders are acting reasonably well. On Monday, distribution day count was reset to zero as Nifty rallied 5% from the last distribution day that occurred on April 15. We remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases.

Though distribution day is a primary indicator of market weakness, one should also keep a check on other indicators. When in a Confirmed Uptrend, it is an anomaly to see heavy volume with no upward price progress and if we see clusters of this activity we suspect that the momentum may have shifted.

Currently, picking up the stock from a sector as a whole in positive momentum becomes important. Group rank feature can be very helpful. Look for stocks that are among the top 40 groups and show improvement in rank. It has been observed that what is breaking out of a proper base and among top group rank is working well. It is also important that investors don’t play all their cards at once. In our portfolio, we are skewed toward Pharma and Chemical stocks. In the last few days, we had a decent amount of quality leaders in these sectors trading through justifiable entry points.

We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further. Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions.

Key News

Motherson Sumi Sys.(Nse): The company announced that more than 80 out of 152 of its manufacturing facilities across the world have resumed operations. Out of it, 30% are running at more than 80% capacities and rest of them are running at up to 50%. The stock closed 4% higher.

Hexaware Techs. (Nse): The company declared Q4 FY20 results during market hours. PAT and revenue were above consensus. On sequential basis, PAT grew 4.7% to Rs 174.9 crore, while revenue grew 1% to Rs 1,512 crore. As the uncertainty rises due to COVID-19, the company suspended the earlier provided growth guidance. The stock advanced 3.9%.

Lupin (Nse): The company gets USFDA tentative approval for its Arformoterol Tartrate Inhalation Solution. The drug is used for the long-term maintenance treatment of bronchoconstriction in patients with chronic obstructive pulmonary disease. The stock closed flat.

Model Portfolio Closed 0.4% Lower
Today, our portfolio remained unchanged.

Portfolio stock performance:

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Author's Bio: 

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