Weekly Trend Report
- 12th Jan 2026
Week Gone By
Domestic equity benchmarks ended the week with steep losses, as all trading sessions closed in the red amid a mix of global and domestic headwinds. Investor sentiment weakened due to escalating geopolitical tensions following U.S. military action in Venezuela, renewed concerns over potential U.S. tariffs, and continued foreign institutional investor outflows. Further adding to market volatility was a mixed set of Q3 earnings and corporate updates, which failed to offer clear directional cues. Consequently, investors remained cautious, resulting in broad-based selling and sustained losses throughout the week. For the week ended Friday, 09 January 2025, the S&P BSE Sensex declined 2,185.77 points, or 2.55%, to close at 83,576.24, while the Nifty 50 fell 645.25 points, or 2.45%, to settle at 25,683.30.
Week Ahead
The domestic equity market may attempt a rebound in the coming week, aided by bargain buying after the recent sharp correction. However, gains are likely to be capped as global trade concerns, political uncertainty from Washington, and continued foreign fund outflows weigh on investor sentiment. A key catalyst will be the much-awaited US Supreme Court verdict on the legality of tariffs imposed by former President Donald Trump. On the domestic macro front, markets will navigate a busy economic calendar. December CPI inflation data, scheduled for release on Monday, January 12, will be closely monitored for trends in food prices and their implications for the Reserve Bank of India’s policy stance. On Thursday, January 15, attention will turn to December trade data, including exports, imports, and the trade balance. Globally, the spotlight will be on US December inflation data due on Tuesday, January 13, with both headline and core CPI readings closely watched for signals on the Federal Reserve’s interest rate trajectory.
Technical Overview
- The Nifty 50 index has witnessed a sharp bearish reversal this week, effectively negating the positive implications of last week’s Hammer pattern. The index faced aggressive selling pressure at higher levels and surrendered all recent gains to close near 25,703.
- On the weekly chart, the index has formed a massive Bearish Engulfing Candle. The body of this red candle completely covers the previous week’s price action. This is a potent bearish signal, indicating that the bears have overwhelmed the bulls and regained total control of the trend.
- The index has decisively sliced through the 50-day moving average, which was acting as dynamic support around 25,850. A close below this key short-term average signifies a shift in the intermediate trend from bullish to bearish.
- The selling leg this week was accompanied by above-average volume, particularly on the large red candle days. This distribution volume suggests that institutional players are offloading positions rather than accumulating.
- The immediate make-or-break level is 25,600 – 25,500. A sustained close below this zone will trigger a fresh leg of selling, targeting the 25,200 – 25,300 zone.
- The previous support has now flipped to resistance at 25,850 – 25,900. A reclaim of this level is the first requirement to stabilize the market, but meaningful strength will only return above 26,150.
- The daily RSI has broken down from the 50-support zone and is actively trending downwards, currently near 40. This indicates gaining bearish momentum and suggests the path of least resistance is now to the downside.
- The daily MACD histogram has expanded deeply into the negative territory, and the signal lines are diverging downwards. This acceleration confirms strong selling interest and a lack of immediate buying support.
- Parabolic SAR dots remain firmly above the price candles on the daily chart, reinforcing the positional “sell” signal. The gap between the price and the dots is widening, which often accompanies strong trend moves.
- Conclusion:
The Nifty 50 has suffered a significant technical breakdown this week. The formation of a Bearish Engulfing candle on the weekly chart and the violation of the 50-day moving average confirm that the short-term trend has turned negative. The failure of last week’s Hammer support has trapped bulls, shifting the market texture to “Sell on Rise.” The index is now precariously perched at the final swing support of 25,600. A breakdown here opens the floodgates for a deeper correction towards the 25,300 zones.
To view the detailed report click here to Download
