Market Pulse: Downtrend
On Monday, the market status shifted to a Downtrend as Nifty breached its recent correction low of 21,965. Nifty Midcap and Smallcap indices also hit 52-week lows, with all major sectoral indices trading below their key moving averages-signaling broad market weakness.
The advance-decline ratio favored decliners, and many stocks broke below crucial support levels, deepening their consolidations. In such an environment, preserving capital by staying on the sidelines is wise, as buying during a downtrend can be risky.
Looking ahead, the market status will be shifted to a Rally Attempt if Nifty closes in positive territory or finishes in the upper half of its daily range and holds above that low for three consecutive sessions. A Follow-Through Day (FTD) would then be needed to confirm a change to an Uptrend. If that happens, the focus will shift to high-quality stocks breaking out of early-stage bases and exhibiting strong relative performance with healthy institutional accumulation.
Global Market View
The stock market in Indonesia is in a Rally Attempt, signaling early signs of a potential recovery that require confirmation. On the other hand, India, China, USA, UK, Canada, Germany, Japan, Hong Kong, Singapore, South Korea, Taiwan, Malaysia, Mexico, Brazil and Thailand is in a Downtrend, reflecting continued market weakness and caution among investors.
Yesterday's Market Action
India's benchmark index Nifty 50 closed up 1.69% on a volume -27.64% lower than yesterday. The index opened with a gap-up of 1.29%, trading in a range between 22,270.85 and 22,697.20, and closed at 22,535.85. The day exhibited a strong up move with 49 advancing stocks and only 1 declining, indicating broad-based strength. The index is currently -1.85% below its 21-day SMA, -1.80% below its 50-day SMA, and -14.5% off its 52-week high, suggesting that while the index has gained, it still faces significant downside pressure.
The index recovered nearly 400 points from the day's low and closed above the 22,000 mark as well as the 100-week moving average (22,150). Going forward, the 100-WMA will act as a key support. A sustained move below it may trigger further downside toward the 21,000-22,000 zone, while holding above it could lead to a short-term rebound toward 22,700-22,800.
Buy Watchlist
Bharti Airtel, Gabriel India, Aavas Financiers, Vadilal Industries, Marico and more.
Key News & Earnings Updates
Vodafone Idea issues 3,695 crore equity shares to the Government of India for ₹36,950 crore, raising the government's stake to 48.99%.
Gail (India) establishes wholly owned subsidiary, GAIL Global IFSC, at GIFT City, Gujarat, to operate as a finance company.
Concord Biotech Ltd gets USFDA approval for Teriflunomide tablets for multiple sclerosis.
Ntpc Green Energy Ltd forms 74:26 JV with MAHAPREIT, NTPC-MAHAPREIT Green Energy, to develop renewable energy parks in Maharashtra and beyond.
Bharat Petroleum forms JV with Sembcorp Green Hydrogen India to explore renewable energy and green hydrogen projects in India.
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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.