Weekly Trend Report
- 23rd September 2024
Week Gone By
The Indian frontline indices witnessed significant gains, recording their all time high for the second straight week. The positive sentiment in the market was influenced by the Fed decision to cut rates by 50 bps. However, significant selloff was also evident in the broader market largely due to the rising concerns of global slowdown. India’s WPI cooled to a four month low of 1.31% in August primarily due to decline in prices of manufactured goods and food items. The global markets remained largely positive during the week. The key highlight for the week would be the decision of rate cut by the Fed and BOJ’s decision to keep the rates unchanged.
Week Ahead
Participants will continue to closely monitor the key economic data about to be released in the week coming which will likely serve as a trigger for the market. The investors will be keenly following the activities of FII/DII while keeping a close watch on the economy. The participants will likely be taking a cautious stance during the week amidst the concerns of global economic slowdown. The key events to lookout during the week would be the US Manufacturing PMI, US QoQ GDP data and US Core PCE Price Index.
Technical Overview
- Throughout the trading week, the benchmark index displayed limited activity and remained within narrow ranges, indicating reduced volatility.
- However, on Friday, there was a surge in buying activity by FIIs, leading to the Nifty50 reaching record highs of 25849 and closing near the upper quartile of the trading range.
- By the end of the week, most broader and thematic indices were confirmed to be in an uptrend with improving positive momentum. Many stocks trading their 10- and 20-day moving averages displayed positive recovery, although they still remain below the median threshold.
- Conversely, the number of stocks trading above their 50- and 200-day moving averages is well above their medians, signaling the continued strength of the primary trend.
- While market breadth demonstrated some improvement towards the end of the week, the 5-day breadth ratio remains below par, necessitating further improvement for favorable market conditions.
- The increase in market breadth volume also suggests heightened stock participation, a positive sentiment. Despite mid and small-cap indices experiencing selling pressure on Thursday, they remain above their 50-day moving average, crucial for maintaining a positive structure.
- The banking index exhibited significant recovery and currently trades 4% away from the mean, indicating the potential for further upside.
- The Nifty50 showed limited activity until Friday, making it essential to observe follow-through above the previous day’s high for the momentum to continue.
- On the technical front, 25330 serves as immediate support, followed by 25200, and maintaining levels above these thresholds is crucial for sustaining bullish strength.
- The swing confidence level remains at 50, indicating that the portfolio should assume half of the allowable open risk.
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