Nifty Midcap & Smallcap recover from days low
Interestingly, more than 450 stocks on NSE Exchange have seen a terrific recover from the lower levels of the day.
Market Update at 2:35 PM:Indian markets have staged a smart recovery from the lower levels. Nifty recovered almost 100 points from the day’s low and trading with a modest loss of 27 points. However, what has caught the attention of investors is a spellbound recovery in the broader markets with Nifty Midcap and Smallcap recovering 1.56 per cent and 2.03 per cent, respectively from the day’s low.
With the recovery seen in the broader market, the advance-decline ratio has substantially improved as nearly 449 stocks were seen advancing as against 1,287 stocks that are declining. This ratio was worst in the first half of the trading session.
Interestingly, more than 450 stocks on NSE Exchange have seen a terrific recover from the lower levels of the day. This includes names such as Ashok Leyland, Apollo Hospitals, BEL, Birla Corporation, Bector Food, Century Textile, Brigade, and many more.
Market Update at 10:35 AM: Selling pressure intensified in the Indian market as Nifty & Sensex plunged half a per cent each. Among the sectoral indices, barring Nifty Metal & Nifty Energy, all other sectoral indices were down with Nifty Realty slipping over 3.36 per cent.
The broader market indices were bleeding red with Nifty Midcap 100 & Smallcap 100 inching lower by 1.99 per cent and 2.80 per cent, respectively. Market breadth is extremely poor with only 130 stocks advancing against 1,605 declines.
Big news coming from the US market is that US Senate passed a USD 1 trillion infrastructure bill, and it is said to be the biggest burst of spending on US public works in decades. This aided the sentiment for steel stocks and was reflected in Dow Jones US Steel Index, which jumped 7.35 per cent on Tuesday. Hence, keep a close eye on steel stocks in today’s trading session.
On Tuesday, Nifty eked out modest gains on a volatile day as it witnessed a movement of about 157 points during the day. This volatile move led to the formation of a long-legged Doji-like candlestick pattern on the daily chart of Nifty.
For the past four trading sessions, Nifty is seen moving in a band of 16,176-16,359. Within this range, it has formed two indecisive as well as two bearish candles. Well, in the past also, the market had exhibited a similar kind of behaviour post the sharp run-up.
After an impulsive move, we expected this consolidation. The price is back inside Bollinger bands after spending three days out of the bands. As the consolidation is already four days old, the momentum is declining. The consolidation may continue for another two to three days. The zone of 16,146.90-16,176.15 is an important support for the index in the near term. As long as it trades above this region, be with a bullish bias.
For the past one week or so, the market breadth has turned negative, including the breakout day for Nifty. The mid and small-cap indices turned bearish, and the mid-cap index confirmed negative divergence with Tuesday’s fall. Even the much broader index, which represents over 90 per cent of the market capitalisation i.e. Nifty-500 has declined in the past three days. Once the underperforming BFSI sector is lending support to markets. For the time being, it's better to trade stock-specific and any directional trade on the index should be avoided.