Weekly Trend Report
- 19th Aug 2025
Week Gone By
Indian equity benchmarks higher for the week, snapping a six-week losing streak, supported by positive global cues and easing inflation data. During the week, Nifty 50 climbed 1.10% to settle at 24,631.30, while the Sensex gained 0.92%, ending at 80,597.66. Gains were led by optimism around softening CPI and WPI readings, despite mid-week pressure from financial stocks. However, broader market indices underperformed, with both mid- and small-cap indices ending in the red. Domestically, India’s retail inflation dropped to 1.55% in July, the lowest since June 2017, while wholesale inflation stayed negative at -0.58% due to falling food and energy prices. However, the trade deficit widened to $27.35 billion from $18.78 billion in June, driven by weaker exports and higher imports. Globally, in the U.K., Q2 GDP grew 0.3%, beating expectations, though labor market indicators showed weakening job vacancies. Japan’s manufacturing sentiment improved following a U.S. trade agreement, while Australia’s jobless rate edged down to 4.2%. In the U.S., CPI rose 2.7% YoY in July, with core inflation accelerating to 3.1%.
Week Ahead
Next week, investor sentiment will be shaped largely by global cues, with limited domestic triggers on the calendar. On the domestic front, the key highlight will be the July unemployment rate, due on August 18. Additionally, PMI data for August—covering manufacturing, services, and the composite index—will be released on August 21. Globally, China will announce its Loan Prime Rates for the 1-year and 5-year tenors on August 20. In the US, Building Permits and Housing Starts data for July will be released on August 19, followed by the FOMC Minutes on August 20. Existing Home Sales data for July will be released on August 21.
Technical Overview
- Nifty’s 1% rise marks a psychological shift after relentless declines. This may trigger short covering and tentative buying interest, but the magnitude of the bounce is still small compared to the prior fall.
- The index has shown signs of stabilising near the lower boundary of the falling channel and is now testing the upper channel line. A decisive breakout would open the door for a more meaningful recovery toward higher resistance levels.
- Buyers stepped in near 24,350 a previously identified support level. This reaction reinforces its importance; however, repeated testing could weaken it, so a sustained close above 24,500 remains key.
- Price is attempting to challenge the 20-day EMA, which has acted as dynamic resistance during the downtrend. A clean close above this would improve the short-term technical tone and allow for an upside push toward 24,800.
- The MACD histogram has narrowed on the negative side, hinting at reduced selling momentum. The MACD line, however, still remains below its signal line suggesting that bullish conviction is still developing.
- The ADX remains elevated at 33, indicating the downtrend is still technically strong. But if ADX starts to turn lower while price moves higher, it could confirm that bearish momentum is losing steam.
- The RSI has risen from near-oversold territory toward the mid-40s, showing improved buying strength. This shift is constructive, but crossing above 50 would be the first sign that bulls are regaining control.
- A notable rise in volumes accompanied Friday’s gain, suggesting the move was supported by stronger participation a bullish hint if it continues in the coming sessions.
- The first upside hurdle is 24,800, followed by the psychologically and technically significant 25,000 level. If these levels are reclaimed, the medium-term outlook would shift from cautious to neutral.
- Conclusion:
Nifty has finally snapped its six-week losing streak with a modest bounce, hinting at early stabilisation. Holding above 24,500 will be critical for further upside toward 24,800–25,000. A close below 24,350, however, could quickly reinstate selling pressure and target lower supports.
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