Weekly Trend Report
- 23rd March 2025
Week Gone By
The Indian equity markets witnessed a strong rally over the past week, driven by robust foreign institutional investor (FII) inflows, easing concerns over U.S. interest rates, and attractive valuations in large-cap stocks. Financial stocks played a crucial role in the market’s upward momentum, with Bajaj Finance gaining traction following a leadership announcement. The broader market outperformed frontline indices, with mid-cap and small-cap stocks seeing significant buying interest. The Indian
rupee also strengthened notably against the U.S. dollar, supported by strong inflows. On the macroeconomic front, India’s trade deficit narrowed significantly in February due to a sharp decline in imports, marking the lowest deficit since August 2021. Additionally, India’s wholesale price index (WPI)-based inflation saw a slight uptick in February, primarily due to rising prices of manufactured food products and other goods. On the global front, The Bank of Japan kept interest rates steady at 0.5%,
as expected, citing the need to assess the impact of potential U.S. tariffs on Japan’s export-driven
economy. In the US, the Fed maintained its benchmark overnight interest rate in the 4.25%-4.50% range and signaled that two quarter-point rate cuts are likely later this year.
Week Ahead
The Indian stock market’s positive momentum is expected to continue in the coming week, supported by strong underlying trends and renewed optimism from the U.S. Federal Reserve’s rate-cut outlook. Foreign fund inflows in recent sessions have further boosted investor confidence, although foreign portfolio investors (FPIs) have remained net sellers in March. On the domestic front, key economic indicators, including the upcoming HSBC India PMI data, will provide further cues on economic activity. While optimism prevails, global factors and FPI trends will be closely watched for potential market direction. US Core PCE Price Index MoM data for February will release on 28 March 2025 and quarterly GDP growth data will be released on 27 March 2025.
Technical Overview
Strongest Weekly Gain in Four Years
Nifty surged 4.27%, marking its best weekly performance since February 2021. It crossed 23,400 intra-day before settling at 23,350, gaining 160 points.Breakout Above Key Resistance
The index moved above the 20-day EMA (22,763.54), confirming a bullish breakout. The next major resistance is at 23,762 – 23,991, which needs to be surpassed for further upside.Completion of Head & Shoulders Breakdown
The bearish pattern played out, with a low near 21,017.35. The recent rally indicates a shift in market sentiment, favoring buyers.Directional Movement Index (DMI) Signals Strength
The DI+ (green) is above DI- (red), confirming increasing bullish momentum. The rising ADX suggests a strengthening trend with higher conviction.RSI Shows Bullish Divergence
The RSI at 66.29 indicates renewed buying strength. Previous bullish divergences successfully led to a price recovery.MACD Turns Positive
The MACD histogram has turned green, signaling a shift toward upward momentum. A sustained crossover could drive the index towards 24,000+ levels.Resistance Levels to Watch
The immediate hurdle is at 23,762 – 23,991, which may act as a short-term barrier. If sustained, the index could test the 24,805 – 25,034 zone in the coming weeks.Critical Support Levels
Immediate support is at 22,787 – 22,763, with stronger demand near these levels. A break below could see further downside towards 22,104 – 21,782.Market Outlook and Strategy
A close above 23,400 could strengthen the bullish momentum and push the index toward 24,000+. Profit booking is expected near 23,800-24,000, which could lead to short-term consolidations.
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