Updated: September 14, 2020
By MarketSmith India Research Team
Today’s Action
Nifty, -0.2%; Sensex, -0.3%; Nifty Midcap, +2.6%; Nifty Smallcap, +5.4%;
Market Pulse Uptrend Under Pressure
Distribution Day Count: Seven
Nifty gapped higher this morning and held the gains in the first half. However, in the second half, Nifty staged a downside reversal, dropping nearly 200 points off intraday highs. The volume was higher compared with the previous session. So, we will consider today’s session as a distribution day. Nifty breached its 21-DMA intraday but managed to close above it. The action in broader indices was very constructive. Nifty Midcap and Smallcap closed 2.6% and 5.4% higher, respectively. On the sectoral front, Nifty IT (+4.4%) outperformed, followed by Nifty Realty (+3.7%) and Auto (+0.7%). Nifty Bank and Financial Services were top losers, closing with a cut of 1.7%. Advance-Decline ratio was skewed toward advancers. Out of 2,207 stocks traded, 1,276 advanced, 543 declined, and the rest remained unchanged.
As the market is in an Uptrend Under Pressure, investors should proceed ahead with caution. Unless a stock shows exceptional fundamental and technical strength, no new addition to the portfolio is advised. Investors should consider booking profits in stocks that have performed well and have advanced 20–25% from their ideal buy points. Looking forward, we will change the status to a Downtrend, if more distribution days are added or if Nifty breaches the 50-DMA (11,202) and the 200-DMA (10,791). On the flip side, the status will be back to a Confirmed Uptrend if Nifty retakes 11,795 level (high during the recent rally).
Key News
Ashok Leyland (+9.8%) today launched a single cab, light truck BADA DOST, reinforcing its offering in the LCV range.
Infosys (+3.5%) announced a definitive agreement to acquire GuideVision, one of the largest ServiceNow Elite Partners in Europe, for up to €30M.
Larsen & Toubro’s (-1.7%) construction arm received multiple orders across business segments in the domestic market. The orders fall under the significant category, which ranges between Rs 1,000 crore and Rs 2,500 crore.
Ashoka Buildcon (+2.1%) gets order for two EPC projects worth Rs 1,300 crore under Bharatmala-I.