Nifty Fails to Retake 50-DMA .

Today’s Action

Nifty, +1.8%; Sensex, +1.8%; Nifty Midcap, +1.9%; 
Nifty Smallcap, +1.9%; Model Portfolio, -2.6%

Market Pulse 

Nifty gapped up to make an intraday high of 9,584 and in the process retook its 50-DMA (9,393). The market participants were enthused by the government’s package. However, it quickly succumbed to selling pressure and erased about 200 points. For the most part of the session, it traded in the range of 9,350–9,430 and closed slightly below its 50-DMA. In the broader market, both Nifty Midcap and Smallcap each closed 1.9% higher.

Barring Nifty Pharma (-1.1%) and FMCG (-0.4%), all the sectoral indices closed in the green. Nifty PSU Bank (+6.1%) and Bank (+4.1%) were the major gainers followed by Nifty Pvt Bank, Realty, and Financial Services, with gains of around 3–4%. The advance-decline ratio was inclined toward decliners. Of 2,115 stocks traded, 1,324 advanced, 452 declined, and the remaining traded flat.

However, we remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases. The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions.

We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. Only invest in stocks that have strong fundamentals (i.e., good sales, earnings, margins, etc.) and that are breaking out of sound base structures on heavy volume.

Key News

Maruti Suzuki India: Revenue fell 15% y/y to Rs 18,198 crore. Sales declined 15% in the quarter. PAT declined 28% to Rs 1,291 crore.

Kotak Mahindra Bank(Nse): NII for the quarter rose 17% y/y to Rs 3,559 crore as NIM improved 26bps to 4.72%. The advances grew 7%, while total deposits grew 16%. However, PAT fell 10% to Rs 1,266 crore, due to 6x increase in its provisions.

Thank you!!