By Vipin Khare Director- Research, William ONeil IndiaWhere are We This week, the market saw important earnings releases, helping investors gauge operational situations in various sectors.
The Nifty breached its 21-DMA during the week, after a strong run of more than 30 days trading above it.
Although this is considered as a weak technical signal, the index retook it later in the week.
It remains to be seen whether it manages to trade above the 21-DMA in the upcoming sessions.What is in Store The index trades comfortably above its 50- and 200-DMAs.
Going forward, well be cautious about the distribution-day count.
Currently, the count is one, but a cluster of two to three distribution days next week will mean a clear weakness.
On the upside, follow-though days with higher highs will be a sign of increasing strength.
The recent as well as all-time high level of 11,856.2 may act as resistance.What can Investors Do A distribution day count of one is not a point of worry as long as Nifty50 holds above its 21-DMA.
Investors may stay invested, but this is the time to actively manage exposures.
Three or more distribution days within an eight-day window would be a signal to significantly trim exposures.
On the flipside, additional follow-through days with higher highs will offer appropriate opportunities to bet heavier in the market.
The key will be to focus exposure on fewer and resilient stocks.
One can become aggressive on stock selection as and when market hints towards improved breadth.