Weekly Trend Report
- 12th May 2025
Week Gone By
This week, key Indian stock indices faced significant losses due to rising tensions between India and Pakistan following missile and drone attacks. The Sensex and Nifty both dropped over 1%, with the broader market performing even worse. By Friday, May 9, 2025, the Sensex fell 1.30%, losing 1,047.52 points, closing at 79,454.47. Similarly, the Nifty dropped 1.39%, losing 338.7 points, settling at 24,008. The BSE Mid-Cap and Small-Cap indices also saw declines of 1.39% and 1.31%, respectively. On a positive note, India’s Goods and Services Tax (GST) collection reached an all-time high, growing 12.6% year-on-year to Rs 2.37 lakh crore in April. Additionally, foreign currency assets rose by $2.168 billion, bringing the total to $580.663 billion. Despite strong economic data, geopolitical tensions dominated the week, leading to high market volatility
Week Ahead
The domestic stock market is expected to face a bumpy week ahead due to rising tensions between India and Pakistan, which are affecting investor sentiment. However, analysts remain hopeful because of India’s strong economic fundamentals, reduced global risks, and consistent foreign investment. Key economic data is due this week, including India’s wholesale price inflation on May 14 and balance of trade data on May 15. The U.S. will also release its inflation data on May 13, and Federal Reserve Chairman Jerome Powell will give a speech on May 15. The Federal Reserve has kept interest rates steady at 4.25%-4.50% for the third meeting in a row. In the short term, the market is expected to stay within a certain range, but any surprises in inflation or trade data could change the outlook quickly.
Technical Overview
- Nifty closed at 24,008, ending the day with a sharp cut of 265 points (-1.10%). The index formed a strong bearish candle, breaking below the short-term support zone and erasing gains from earlier sessions.
The index has now closed near the 20-day EMA, which is acting as immediate support around 24,000. Price is still marginally above the 50-day EMA, but momentum has clearly weakened.
Ichimoku cloud base continues to provide a cushion, but today’s bearish close inside the cloud suggests hesitation. A further close below 23,900 could invite more short-term pressure.
RSI has cooled off to 53.88, reflecting weakening momentum from recent overbought levels. However, it is still above the 50-mark, meaning bullish momentum is not fully lost yet.
The ADX remains elevated (~19), with +DI slightly above -DI, suggesting the trend is still up, but recent weakening of +DI signals that bulls are losing strength.
The MACD remains in the green zone but histogram bars have started shrinking, indicating a fading bullish momentum.
Volumes were on the higher side today, which confirms that the selloff was not just intraday volatility but had institutional participation.
Bearish divergence in RSI played out as the index failed to hold above 24,500 despite making higher highs earlier — suggesting the uptrend may now be transitioning into consolidation or a minor pullback
Structurally, the rising support trendline from March lows has not yet been broken, but it’s now at risk. 24,000–23,900 remains the critical support zone to hold.
Outlook: For the week ahead, holding above the 24,000 level is crucial to keep the possibility of a tactical bounce alive. A breakdown below 24,000 could drag the index toward 23,675–23,500 in the short term. On the upside, resistance remains at 24,500 and 24,775 — only a close above these would reestablish bullish momentum.
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