Weekly Trend Report
- 21st Jul 2025
Week Gone By
The Indian equity benchmarks ended the week with sharp losses, dragged down by weak earnings from major IT and banking names, despite intermittent relief from easing inflation data. The Sensex slipped 742.74 points (0.90%) to 81,757.73, while the Nifty 50 fell 181.45 points (0.72%) to 24,968.40, though mid and small caps outperformed with weekly gains of 1.04% and 1.46%, respectively. Key companies like HCL Tech, Axis Bank, and Tech Mahindra reported disappointing results, whereas ITC Hotels and SBI (QIP Issue) posted positive surprises. On the macro front, India’s CPI cooled to a multi-year low of 2.10% in June, while WPI inflation stayed negative, and forex reserves fell by $3.05 billion. Globally, mixed signals from Japan, China, and Singapore, alongside renewed trade war concerns and softening inflation in major economies, added to the cautious investor sentiment.
Week Ahead
The upcoming week (July 21-25) is expected to witness heightened volatility in the domestic equity markets, driven by mixed global cues and a packed Q1FY26 earnings calendar. While India’s macroeconomic environment remains supportive, thanks to easing inflation, declining interest rates, a favorable monsoon, and softer crude prices, market participants remain cautious due to stretched valuations, making corporate earnings upgrades crucial for sustaining market momentum. The earnings season will dominate market sentiment, with heavyweight banks like HDFC Bank, ICICI Bank, and Yes Bank kicking off the week, followed by major results from companies such as UltraTech Cement, Infosys and Bajaj Finance through the week. On the macro front, infrastructure output data will be released on July 21, while PMI data for manufacturing, services, and composite will be announced on July 24. Globally, attention will be on Fed Chair Jerome Powell’s speech, US existing home sales, the ECB interest rate decision, and US durable goods orders, all of which may influence market direction amid ongoing concerns about persistent US inflation and trade disruptions.
Technical Overview
- The index attempted multiple times to sustain above the upper band of resistance but failed to attract follow-through buying. Price action shows upper wicks and reversals near 25,250-25,400 zone, suggesting active supply and short-term profit booking by market participants.
- Despite intraday moves above 25,000, the index has failed to close above this level on a weekly basis. This inability reflects indecision and raises caution for bulls. Sustained trade below 25,000 mark increases the probability of a deeper pullback.
- This range coincides with recent swing lows, horizontal supports, and also aligns with the mid-point of the upward channel. A break below 24,700-24,500 zone may extend the decline toward 24,100–23,900, which is the next demand area.
- The ADX is below 15, indicating a weak directional trend. This suggests a lack of strong momentum from either bulls or bears, and often precedes a consolidation phase or trend reversal depending on the follow-up move.
- The Relative Strength Index (RSI) has cooled off and is trending flat below the midline (50). This loss in momentum without reaching overbought territory reflects distribution rather than healthy profit-taking.
- While the price remains above the Ichimoku Cloud, which is generally bullish, the base and conversion lines have started to flatten. This suggests a pause or loss of acceleration in the prevailing trend. The cloud is thinning ahead, indicating possible volatility.
- Nifty continues to move within its medium-term rising channel. However, the recent candles are showing upper wicks and smaller real bodies, which often indicates supply on rise and loss of strong buyer conviction at higher levels.
- A decisive breakout above 25,800 will invalidate current weakness and resume the bullish structure toward fresh highs. A break below 24,500 will intensify selling, potentially dragging the index to 24,100–23,900. For now, the index is in a no-trade zone unless it gives directional confirmation beyond these critical levels.
- The index has breached the 10-day EMA envelope, a key short-term dynamic support zone, which suggests the trend may be undergoing a short-term shift or cooling off
- Multiple indecisive to bearish candles near the recent highs indicate distribution, with price rejection visible above the 25,270–25,300 zone
- The 14-day RSI has slipped to 48.75, losing its grip above the neutral 50 mark, indicating weakening momentum and increased vulnerability to further downside.
- While +DI at 24.06 still remains above -DI at 24.14, the spread has sharply narrowed. Combined with a low ADX at 20.15, this indicates a fading trend and rising chances of a consolidation or minor reversal.
- The MACD histogram remains in green territory, currently at +150.56, but has begun to flatten, hinting at slowing upside traction.
- Price is now hovering just above the 25,100–25,000 zone — a region that has acted as short-term support in recent weeks and is being retested.
- Failure to hold the support zone this week could lead to deeper retracement, possibly toward 24,600 or lower, as bullish conviction appears to be waning.
- Unless Nifty stabilizes above 25,100, the short-term trend may flip in favor of bears. A close below 25,000 could trigger broader unwinding.
- Conclusion:
Nifty has slipped below the 10-day EMA envelope and registered two successive weekly losses, signaling caution. The index must hold 25,100–25,000 in the upcoming week to avoid triggering further downside toward 24,600. Momentum indicators are softening, and traders may adopt a wait-and-watch stance unless strength returns above 25,270.
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