Global stock markets: Dow 30,-2.3%; S&P,-2.8%;Nasdaq,-4.8%;Nikkei, -1.6%; Hang Seng, -1.4%; KOSPI, -0.9%

Yesterday, Nifty opened with moderate gains and continued the positive momentum in the first hour, making a high of 11,431. After moving sideways for a while, Nifty dropped 150 points from the day's high, closing 30bps lower. As the volume was higher compared with the previous session, we will consider yesterday’s action as a distribution day. Higher selling was witnessed after European markets opened 1% lower. Broader indices were hit hard. Nifty Midcap and Smallcap closed 1.4% and 1.0% lower, respectively.

On the sectoral front, only Nifty IT closed higher. Nifty Metal and Media closed 3.2% lower, while Nifty Realty and Pharma were down 2.0% and 1.6%, respectively.

The market status was recently changed to an Uptrend Under Pressure. We will be slightly cautious while initiating fresh long positions. We will change the status to a Downtrend if two or three more distribution days are added or if Nifty breaches its 50- and 200-DMA. On the flip side, the status will be shifted back to a Confirmed Uptrend if Nifty retakes the 11,795 level (high made during the recent rally).

Key News

Idbi Bank has sold the remaining 10,25,683 equity shares constituting 0.21% of the paid-up capital of the National Stock Exchange of India (NSE).

Future Consumer reported Q1 FY21 results yesterday. Revenue from operations was down 59.8% q/q to Rs 380.5 crore. It reported a loss of Rs 68.4 crore, compared with a loss of Rs 175.5 crore in Q4 FY20.

Indian Hume Pipe bagged a water supply contract worth Rs 134.82 crore in Odisha.

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, 54%; Rally Attempt, 8%; Uptrend Under Pressure, 30%; Downtrend, 8%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 17%; Rally Attempt, 0%; Uptrend Under Pressure, 70%; Downtrend, 13%.

Buy Watchlist:

Bharti Airtel, Biocon (Nse), Balkrishna Industries, Sun Pharm.Industries, Multi Cmod.Ex.Of India, Indian Energy Exchange, Infosys, Tata Consultancy Svs., Escorts, and Aurobindo Pharma

Author's Bio: 

One stop solution for all your Stock Market needs. Get stock market tips and stock predictions all at one place. A proprietary tool by William O'Neil India following CANSLIM method of investing.