Share markets extend their winning streak over the 5th consecutive week

Equity benchmarks in share markets extended their winning streak over the fifth consecutive week. The Nifty settled the week at the level of 13259 points. Broader markets performed in tandem with the benchmark as Nifty midcap and small-cap gained around two per cent each. Sector-wise, metals, auto, pharma and PSU Banks outperformed last week.

The ongoing rally in the Nifty is backed by continuous improvement in the market breadth as currently 94 percents components of Nifty trading above their long term 200 days SMA compared to last week’s reading of 88 per cent, indicating inherent strength.

The broader market has shown resilience by forming a higher peak and trough on the larger degree weekly and monthly charts and closed at two years high after resolving out of their long term falling channel breakout. The strengthening of market breadth continues to act as a tailwind for the durability of an ongoing uptrend. At the current juncture, 94 per cent components of Nifty midcap and small-cap indices are trading above their long term 200 days SMA compared to last week’s reading of 90 per cent.

Structurally, the current up move off November low of 11557 points i.e. over 1700 points, is strongest compared to September-October rally of 1200 points, indicating robust price structure that makes us confident to revise support base upward at the level of 12800 points.

Meanwhile, the output of eight core industries fell for an eighth consecutive month, declining 2.5 per cent year on year in October month amid the pandemic.

On the other hand, The Reserve Bank of India maintained its repo rate at four per cent, reverse repo rate at 3.35 per cent.

On the commodity front, Brent crude prices were higher at US$49.3 per barrel as compared to previous week's closing price of US$48.1 per barrel. On the contrary, gold prices ended lower at $1844 per ounce as compared to previous week's closing price of $1806 per ounce.

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