Weekly Trend Report
- 19th May 2025
Week Gone By
Domestic equity benchmarks ended the week with strong gains, supported by easing geopolitical tensions following a ceasefire between India and Pakistan, a decline in both retail and wholesale inflation, and the timely onset of the monsoon. According to the RBI, India’s foreign exchange reserves fell by $2.065 billion to $686.064 billion for the week ended May 2. India’s retail inflation in April eased to 3.16%, down from 3.34% in March, while wholesale inflation (WPI) further declined to 0.85% year-on-year. In April 2025, total exports, including merchandise and services, rose to USD 73.80 billion, while imports increased to USD 82.45 billion. Globally, the US headline CPI rose 2.3% YoY in April, and core CPI, which excludes food and energy, registered a 0.2% increase.
Week Ahead
The Indian stock market looks set to extend its upward momentum in the coming week, supported by a mix of favorable domestic and global developments. Investor sentiment remains positive, buoyed by ongoing trade negotiations between India and the United States, which continue to enhance market confidence. On the domestic front, key economic indicators such as the HSBC Flash Composite PMI, Manufacturing PMI, and Services PMI for May are scheduled for release on Thursday, 22 May 2025. Additionally, data on bank loan and deposit growth for the fortnight ending 9 May 2025 will be released on Friday, 23 May 2025. Globally, China will publish its industrial production and retail sales data for April on Monday, 19 May 2025. Japan’s trade balance data for April is due on Wednesday, 21 May 2025, followed by inflation data on Friday, 23 May 2025. In the United States, existing home sales data for April is slated for release on Thursday, 22 May 2025.
Technical Overview
- Strong Upside Continuation – NIFTY extended its rally to close at 25,019.80, marking a sharp move from the April lows and testing a key psychological level of 25,000.
- Crucial Resistance at 25,116 – The index approached a prior swing resistance near 25,116, which now acts as an immediate hurdle. A sustained move above this could open gates for further upside.
- Need for Sustained Hold Above 25,000 – It is essential for NIFTY to hold above 25,000 in the coming sessions to maintain bullish momentum. A failure to do so may lead to range-bound consolidation.
- Short-Term Support at 24,770–24,330 Zone – On the downside, immediate support lies at 24,770, followed by the rising zone of 24,329–24,202. These levels are crucial for trend protection.
- Volume Surge Confirms Strength – The recent rally was accompanied by a volume spike of 432.7M, indicating strong market participation and conviction behind the move.
- Momentum Remains Firm – The RSI at 65.29 is trending higher without being overbought, reflecting strong positive momentum.
- Positive Directional Bias – The ADX shows a rising +DI and increasing trend strength, confirming the continuation of bullish sentiment.
- MACD in Bullish Territory – The MACD histogram remains positive with expanding green bars, affirming a bullish bias in the short term.
- Parabolic SAR Supports Uptrend – The Parabolic SAR dots below price suggest that the uptrend remains intact as long as price doesn’t breach key support levels.
- Conclusion
While the overall structure remains positive, NIFTY must sustain above the 25,000 mark for the rally to continue. Failure to hold this level could result in sideways consolidation between 24,770–25,116, with a possible revisit of support near 24,330. Traders should monitor price action closely around the 25,000 zone for directional clarity.
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