Weekly Trend Report
- 04th Aug 2025
Week Gone By
Indian equity benchmarks closed the week with sharp losses as escalating geopolitical tensions and trade concerns weighed heavily on investor sentiment. The announcement of a 25% US tariff on Indian goods and uncertainty surrounding India’s procurement from Russia dampened risk appetite, leading to broad-based declines across large-cap, mid-cap, and small-cap indices. Despite mid-week support from value buying in blue chips and upbeat earnings from select heavyweights like L&T, the overall market mood remained cautious. Macroeconomic positives, including an IMF upgrade to India’s growth forecast and a rebound in manufacturing activity, were largely overshadowed by global volatility, tariff shocks, and weak cues from international markets, particularly China and the US.
Week Ahead
In the upcoming week, markets are expected to remain on edge amid global trade tensions and a flurry of high-impact economic events. Investor focus will largely pivot toward the RBI monetary policy decision, due Wednesday, especially after its surprise 50 bps rate cut in May. With borrowing costs at their lowest since August 2022, market participants will watch closely for further cues on the central bank’s policy stance amid evolving growth-inflation dynamics. On the data front, India’s Services and Composite PMI readings for July will be released, offering insights into domestic demand conditions following signs of a mild slowdown from June’s highs. Meanwhile, a busy earnings calendar featuring names like SBI, Tata Motors, LIC, and Adani Ports will also drive stock-specific movements. Globally, the release of China’s Caixin Services PMI and trade data will be key, especially given recent signs of weakness in the country’s services sector. In the US, factory orders and ISM Services PMI data for June and July respectively, along with crude inventory updates, will guide sentiment. Together, these indicators will shape the broader market narrative around global demand, trade imbalances, and monetary policy expectations across key economies.
Technical Overview
- Nifty has now declined for five straight weeks — a rare occurrence that signals persistent selling pressure. This pattern reflects broader risk-off sentiment and consistent profit booking at higher levels.
- The rising channel that has guided the Nifty higher over the past few months has been broken decisively on the downside. This invalidates the prior uptrend structure and often marks a change in market behavior.
- Nifty has convincingly slipped below its 50-day exponential moving average. This key average, which often acts as a support in uptrends, is now likely to act as resistance.
- Price is approaching a well-established horizontal support zone near 24,400. This level has previously acted as a pivot. A close below this could lead to further decline toward 24,000 and even 23,800 in the near term.
- The MACD indicator has given a clean bearish crossover with the signal line, and the histogram has turned negative. This typically marks a momentum shift from bullish to bearish and suggests increased likelihood of sustained downside.
- The ADX is currently at 13.09, indicating a low-strength trend. While this doesn’t confirm a strong downtrend yet, it does suggest a lack of conviction on either side.
- The Relative Strength Index is currently at 36 — a bearish reading. It has broken its prior support zone around 45 and is pointing downward. A fall below 30 would indicate oversold conditions.
- Price is now trading below the cloud, while both the Tenkan-sen and Kijun-sen lines are sloping downward. The Senkou Span A and B are flat, suggesting a lack of upward momentum.
- Despite intraday recoveries, the index is consistently facing rejection in the 25,000–25,200 range. This zone aligns with the 50 EMA and previous breakdown levels. A breakout above this band with strong follow-through is essential.
- Conclusion:
To sum up, Nifty is under clear technical pressure. Multiple indicators — from trendlines and moving averages to oscillators like RSI and MACD — point to a weakening structure. If the index breaches 24,400 decisively, expect further drift toward 24,000–23,800. For any signs of revival, bulls need to reclaim 25,000–25,200 on a closing basis. Until then, the risk remains tilted to the downside, and positional traders should maintain a cautious outlook.
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