Weekly Trend Report
- 25th Jan 2026
Week Gone By
Indian equity markets witnessed a sharp sell off during the week, dragged down by profit booking, heightened geopolitical tensions, a weak rupee and mixed Q3 earnings, with the Nifty slipping below 25,100 and broader markets underperforming. Sentiment remained firmly risk off as the rupee hit a fresh record low of 91.99 against the US dollar, while earnings pressure from the implementation of the new labour code further weighed on heavyweight stocks across IT, banking and energy. Globally,
markets grappled with slowing growth signals, as softer inflation in Japan, weaker GDP prints in South Korea, and decelerating growth in China reinforced concerns around global demand, even as Eurozone inflation moved closer to target. Despite supportive medium term outlook cues such as the IMF upgrading India’s FY26 growth forecast, near term volatility dominated market action through the week.
Week Ahead
Indian equities head into the late January week amid elevated volatility, with sentiment shaped by persistent FII outflows, a weak rupee and mixed global cues, even as bouts of value buying and select defensive pockets offer limited support. Domestically, focus will be on December industrial production, fiscal deficit trends and weekly forex reserves data, especially with the Union Budget approaching and rate expectations in play. Globally, investors will track US macro signals including the Fed’s policy
decision, labour market data, trade balance and producer inflation, alongside crude inventory trends, while China’s industrial profits data will offer cues on demand conditions. Overall, markets are likely to remain sensitive to global risk sentiment and macro developments, keeping volatility elevated in the near term.
Technical Overview
- The Nifty 50 index remains firmly in a short-term downtrend, characterized by a persistent sequence of lower highs and lower lows on the daily timeframe. The index has failed to arrest the selling momentum, closing the week with a negative bias.
- On the weekly chart, the candle formation is Bearish. Contrary to a reversal signal, the substantial real body of the red candleindicates
- that sellers remained dominant throughout the week, selling into every intraday recovery attempt. The close near the lower quartile of the week’s range confirms that the bears are still in control.
- The selling legs are accompanied by steady volume, while the recovery attempts lack significant participation. This volume divergence reinforces the validity of the downtrend.
- The index has broken the 200-day moving average. While there was a minor bounce from this level, the inability to produce a strong bullish close suggests this long-term support is under severe threat. A decisive close below this average would be a major breakdown signal.
- The immediate critical support is at 24,800 -24,850. A sustained breakdown below this level confirms the violation of the 200-DMA, potentially accelerating the slide towards the next major demand zone at 24,500.
- The market texture is sell on rise. Every bounce is being met with fresh supply, creating a waterfall effect on the daily chart. The breakdown of the previous swing support at 25,500 has now converted that zone into a formidable resistance ceiling. Only a decisive close above this supply zone would negate the bearish thesis and signal a potential pause in the current downtrend.
- The daily RSI remains in the bearish territory and is trending downwards. It has not yet shown a decisive bullish divergence or a hook that would suggest a bottom is in place, implying that momentum remains with the sellers
- The daily MACD is in a confirmed sell mode, with the signal lines expanding downwards below the zero line. The histogram shows consistent selling pressure without any immediate signs of exhaustion or convergence.
- Conclusion:TheNifty 50 is in a corrective downtrend, with the weekly chart displaying a bearish continuation structure rather than a reversal. The index is precariously perched at the 200-day moving average, the last line of defense for the long-term bulls. The failure to form a convincing reversal candle suggests that the path of least resistance remains to the downside. The strategy remains sell on rise unless the index can reclaim the breakdown zone of 25,500.
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