Weekly Trend Report
- 29th Dec 2025
Week Gone By
Indian equities ended the holiday-shortened week with modest gains, despite bouts of range-bound and volatile trading amid year end caution. Benchmark indices posted marginal upticks, supported by selective buying even as low volumes, intermittent profit booking and the absence of strong domestic triggers limited upside. Broader markets outperformed, with small-cap indices delivering the strongest gains for the week, while mid-caps ended largely flat to mildly positive, reflecting continued stockspecific interest. Sectoral trends were divergent, with metals and IT emerging as key outperformers, supported by a global commodity rally and selective buying, while consumer durables, capital goods, realty and healthcare witnessed sharper corrections. Globally, mixed cues and uncertainty around growth and policy outlooks kept risk appetite measured, resulting in subdued but resilient market participation into the close of the week.
Week Ahead
Indian equities head into a holiday-heavy and data-light week on a cautious footing, with low volumes and year-end positioning likely to keep markets largely range-bound. In the absence of key domestic macro releases, market direction will be driven primarily by global cues, FII flows, currency movement and stock-specific developments. Globally, attention will centre on the US FOMC meeting minutes, which will be scrutinised for clarity on the Fed’s policy stance and the timing of future rate cuts. US crude oil inventory data will be closely tracked for cues on energy prices and commodity-linked stocks, while US initial jobless claims will provide insight into labour market conditions. From Asia, China’s Manufacturing PMI will be a key indicator of growth momentum and demand trends, with implications for regional sentiment. Additionally, the S&P Global Manufacturing PMI will offer a broader read on global manufacturing activity. Multiple market holidays across the US, China, Japan and Europe are expected to thin participation, keeping volatility contained but directional conviction limited through the week.
Technical Overview
- The Nifty 50 index has formed a classic hammer candlestick pattern on the weekly chart. This candle is characterized by a small real body and a long lower shadow, indicating that while the index faced sharp selling pressure during the week testing lows near 25,700, it managed to recover and close near its opening level.
- This structure signifies strong price rejection at lower levels. The bears attempted to drag the market down, but significant institutional demand emerged at the support zone, forcing the price back up. It represents a defence of the trend rather than an aggressive expansion.
- The daily chart confirms that the recovery was sharp but the close remained relatively flat compared to the open. The index is effectively essentially consolidating within the range of the previous week’s volatility. The immediate hurdle is the weekly high near 26,160. A sustained close above this level confirms the hammer pattern and opens the path for a retest of the all-time high at 26,325.
- The lower wick on the weekly candle confirms that the 26,000 – 25,750 zone is a robust demand floor. The market has now established this level as a critical base for the near term.
- The volume has been average, supporting the view that this is a consolidation and accumulation phase. We are seeing a lack of aggressive selling rather than a surge of aggressive buying at the highs.
- The daily RSI has stabilized near the 50-55 zone. It is neither overbought nor oversold, indicating that momentum is neutral to slightly positive. The indicator is resetting itself for the next directional move.
- The daily MACD remains in a sell mode, but the histogram contraction is visible. This suggests that the downside momentum is fading, but the bulls have not yet generated enough power for a fresh crossover buy signal.
- The Parabolic SAR dots remain above the price candles on the daily chart, acting as immediate overhead resistance. A close above 26,160 is needed to flip this indicator to bullish.
The Nifty 50 has formed a Bullish Hammer on the weekly chart, signaling a potential bottoming out of the short-term correction. The
small real body indicates that while the selling has stopped, buyers are still cautious at higher levels. The market has successfully defended the 25,750 support, validating the “buy on dips” texture. However, unlike a long-bodied breakout candle, this pattern calls for
confirmation. A follow-up move above 26,160 is essential to convert this defence into a new offence towards the all-time highs.
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