Weekly Trend Report
- 25th June 2024
Week Gone By
Domestic shares settled on a slightly sour note Friday. The Nifty 50 held the 23,500 mark, giving up some of its morning gains. Investors seem to be taking a breather with no major economic data or events on on the horizon. While FMCG, PSU banks and oil & gas stocks fell, IT and consumer durables stocks managed to stay afloat. Meanwhile, Across the Pacific, the US stock market experienced some volatility Thursday. Declines in Nvidia Corp. and Apple Inc. were key contributors to the to the tech sector’s weakness. However, the Dow Jones Industrial Average bucked the trend and gained around 300 points.
Week Ahead
Expect the market to remain sideways during the week ahead. Strong rallies could be capped by profit booking. The monsoon’s progress will be closely monitored for its near-term impact on investor confidence. The upcoming GST meeting holds potential for rate adjustments in certain sectors, which could influence market conditions. Investors should be cautious as India’s current account data for Q1 will be released on Friday, 28th June 2024. On the Global front, US durable goods orders data for May will release on Thursday, 27th June 2024. US Q1 GDP data will be released on Thursday, 27 June 2024. The US economy expanded an annualized 1.3% in Q1 2024, below 1.6% in the advance estimate and 3.4% in Q4 mainly due to a downward revision in consumer spending.
Technical Overview
- The 50 index started the shortened trading week with a 114-point gap-up opening, but the index remained mostly unchanged throughout the week.
- Daily trading sessions showed narrow ranges, with little intraday trend.
- While most broader and sectorial indices continued in an upward trend, many of them started to lose their positive momentum, signaling a need for caution.
- The number of stocks trading above their 10 and 20-day moving averages has entered the overbought zone, those above their 50-day moving averages are now above the 50% bullish threshold, and the stocks trading above their 200-day moving averages are above the 75% threshold.
- This suggests a higher likelihood of profit booking in stocks with an extended intermediate trend.
- Momentum breadth has been positive over the last 2 weeks, indicating moderate but specific accumulation.
- The weekly RSI shows bearish divergence against the price as it is not marking fresh high along with price.
- In terms of price action, weak candles were observed during the week, showing signs of exhaustion
- While the index is trading 1.9% above the mean, Nifty faces strong overhead resistance at 23650-23600. Therefore, any upward movements should be used to protect profits at higher levels. On the contrary, the zone of 23250-23000 is anticipated to act as support.
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