Updated: September 22, 2020
By MarketSmith India Research Team
-We moved the market to a Downtrend as Nifty breached its 50-DMA, distribution day count elevated to seven, and many leading stocks failed to hold logical support levels.
-The market status was downgraded to an Uptrend Under Pressure on August 31, and since then, the Nifty was trading range-bound and unable to sustain gains.
-Many stocks continued to take on the technical damage with many moving deeper into their respective bases and breaking below logical support levels. Markets are currently not conducive for holding stocks below their 50- and 200-DMA. It is better to protect capital by staying on the sidelines than to take risks. Although it is tempting to buy stocks on pullbacks during market correction, one should wait for market condition to improve and avoid catching a falling knife.
-Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (11,085) for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas that show the best relative strength with good accumulation.