Weekly Trend Report
- 05th Jan 2026
Week Gone By
Indian equities ended the week on a strong note, with the Nifty 50 scaling a fresh record above 26,300 and the Sensex posting solid gains, supported by upbeat Q3 business updates, robust December auto sales and improving macro indicators. Confidence was further lifted by a sharp rebound in industrial activity, with IIP growth accelerating to 6.7% YoY in November, led by manufacturing and mining, alongside a modest pickup in GST collections in December, reflecting steady underlying economic momentum despite slower domestic consumption growth. Broader markets outperformed the benchmarks, driven by buying interest in auto and cyclical stocks, even as softer PMI readings pointed to some moderation in manufacturing momentum toward the end of the year.
Week Ahead
Indian equities begin 2026 on a resilient footing, supported by strong domestic macro cues and leadership from autos and metals, with the Nifty at record highs underpinning improving Q3 earnings expectations, even as the rupee continues to hover near 89.97 against the US dollar, highlighting persistent external pressures. The focus domestically will be on final HSBC Services and Composite PMI prints for December, along with liquidity indicators such as money supply, bank credit, deposits and forex reserves, to gauge the durability of growth momentum. Globally, investor sentiment will be shaped by key data releases across major economies, including US ISM manufacturing and services PMIs, labour market indicators and non-farm payrolls, China’s PMI, inflation and FX reserves data, and crude inventory trends, with markets likely to balance optimism around risk appetite against evolving macro and currency dynamics.
Technical Overview
- Nifty continues to trade in a strong bullish structure, holding firmly above the 26,000–26,050 demand zone, which has repeatedly acted as a reliable support area
- The index has once again moved back toward the upper resistance band near 26,300–26,350, indicating sustained buying interest on dips rather than aggressive profit booking.
- The 26,000–26,050 zone has acted as a strong price floor, with multiple rejections from lower levels, confirming demand dominance.
- On the upside, 26,300–26,350 remains a clear supply zone, where price has paused multiple times. Importantly, pullbacks are shallow and overlapping, which is a classic sign of trend continuation consolidation.
- Overall price behaviour suggests balance shifting in favour of buyers. A decisive daily close above 26,350 would signal expansion from consolidation and trigger the next leg of the up-move
- Until then, the structure remains bullish but range-bound, with higher probability of an upside breakout than a breakdown.
- Momentum indicators support the constructive setup. RSI has cooled off from overbought levels and is hovering around the 60 zone, suggesting that excess froth has been removed without damaging trend strength. This creates room for the next leg of the rally.
- The MACD histogram has flattened, reflecting consolidation, but the signal lines remain in positive territory with no bearish crossover, confirming that momentum remains supportive of the broader uptrend.
- Conclusion:
The overall setup remains bullish with a consolidation bias. As long as Nifty holds above 26,000 on a closing basis, the index is likely to continue range-to-upward movement. A decisive breakout and sustained close above 26,350 with volume could open the door for the next leg higher in the coming sessions.
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