Global stock markets: Dow 30, +0.9%; S&P, +1.6%; Nasdaq, +3.1%; Nikkei, -0.2%; Hang Seng, -0.3%

Yesterday, Nifty posted a volatile session as it made a day's high of 12,022 within the first 10 minutes and then lost over 150 points from the day's high under selling pressure. Nifty managed to close in the green and it was the eighth consecutive session of advancement. Volume was lower than previous session. In the broader market, both Nifty Midcap and Smallcap showed underperformance and declined 0.6% and 0.4%, respectively.

On the sectoral front, the majority of sectoral indices declined. Nifty Media (-2.4%) declined the most, followed by Nifty PSU Bank (-1.7%) and Realty (-1.1%). On the other side, Nifty IT (+1.7%) and Pharma (+0.9%) advanced the most.

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

-Shalby: The company reported consolidated profit at Rs 24.5 crore in Q2 FY21 against Rs 12.9 crore for the same period last year, while revenue declined to Rs 115.6 crore from Rs 125.7 crore on a y/y basis.

-Cipla: Avenue Therapeutics, a company focused on the development of tramadol for the U.S. market, announced that it has received a complete response letter (CRL) from the U.S. FDA regarding the company’s new drug application (NDA) for tramadol.

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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