Weekly Trend Report
- 16th September 2024
Week Gone By
Domestic barometers clocked strong gains, hitting fresh record highs during the week. The positive sentiment in the Indian market was likely influenced by the upbeat global market mood, fueled by expectations of interest rate cuts by major central banks. This global optimism provided a supportive backdrop for the domestic market. The domestic equity market edged higher in three out of five trading sessions during this week. The Sensex closed above the 82,850 level and the Nifty settled above the 25,350 mark.
Week Ahead
While a rate cut is expected, persistent underlying inflation could temper its size. The recent US CPI report, the last major economic indicator before the meeting, reinforces the need for a rate reduction but suggests caution. India’s balance of trade data for August will release on Monday, 16 September 2024. India’s WPI Inflation data for August will release on Tuesday, 17 September 2024. On Global front, US Fed’s interest rate decision is on Wednesday, 18 September 2024. Japan’s Balance of Trade for August will release on Wednesday, 18 September 2024 and Bank of Japan’s interest rate decision is on Friday, 20 September 2024. These are the key certain to watch out for next week.
Technical Overview
- Throughout the trading week, the benchmark index experienced slow initial activity, followed by progressive accumulation in the first half of the week, leading to a notable upsurge and reaching record highs of 25433 before closing in the upper quartile of the trading range.
- The index closed 504 points higher than the previous week, and the VIX decreased by 17%, signalling reduced pessimism in the market, a favourable development.
- The week concluded with all broader indices and most sectorial and thematic trades exhibiting a confirmed uptrend with positive and improving momentum.
- Regarding market breadth, the number of stocks trading above their respective 10 and 20-day moving averages rose to above their 50% threshold
- While those trading above the 50 and 200-day moving averages continue to reside in the bullish zone. This indicates an improvement in shorter-term trends while the larger trend remains intact.
- With regards to momentum market breadth, there was modest improvement throughout the week, complementing the strength observed in the general market, another positive sign.
- However, market breadth volume remains subdued, indicating continued selective stock participation.
- Concerning price action, the support levels have shifted higher from 24800 to the 25150-25000 zone. Sustaining levels above this will enable the index to continue to accrue bullish strength for a potential increase towards 25800.
- The confidence in the market swing remains notably strong, permitting the undertaking of maximum permissible open risk in the portfolio while maintaining a prudent, stock-specific approach.
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