Weekly Trend Report
- 29th July 2024
Week Gone By
During the week, key equity barometers witnessed decent gains with broader market outperforming the frontline indices. The Nifty 50 settled above 24,800 levels. In the week ending on Friday the S&P BSE Sensex rose 787 points to settle at 81,332.72 while the Nifty 50index gained 303.95 points to settle at 24,834.85. The BSE Midcap and Smallcap index jumped 3.13% and 3.45% to close at 47,706.67 and 54294.35 respectively. During the week the Finance Minister presented the Union Budget for 2024-2025 focusing on employment, skilling, MSMEs and middle class. The HSBC Flash Composite index climbed to 61.4 and Manufacturing index climbed to 58.5 from 60.9 and 58.3 respectively from the previous month. Also, the economic survey projected a real GDP growth rate of 6.5-7% for 2024-25.
Week Ahead
During the upcoming week India’s infrastructure output for June will be declared on 31st July 2024 and India’s manufacturing PMI for July will be released on 1st August 2024. Globally, the US JOLTs Job openings for June will be released on 30th July 2024 and the US Fed Interest Rate decision will be held on 31st July 2024. China will release manufacturing PMI data for July on 31st July 2024 and the Bank of Japan’s interest rate decision is on 31st July 2024.
Technical Overview
- The benchmark index began the trading week quietly before the Union budget day. High volatility marked the event day, with Nifty dropping 500 points from the day’s peak, then recovering nearly 400 points in the second half. It hit a crucial low of 24074, making it an important level. As the week progressed, the volatility settled, and the index experienced a strong pullback to reach highs of 24861, closing the week in the upper quartile of the trading range.
- The trading session on Friday marked the 36th session following the Union Election. The significance of this uptrend lies in the fact that the price action has consistently defended its prior day’s low on a closing basis, indicating strength and momentum in the ongoing trend.
- Throughout the week, the VIX experienced a 17% decline, signifying diminished pessimism regarding future outlooks, thus presenting a favorable indication.
- The majority of broad indices are currently trading in a confirmed uptrend with positive momentum. However, Smallcap and Nifty Next 50 are displaying some pressure at the top.
- Most sectoral indices are currently exhibiting a confirmed uptrend with positive momentum, except for the Media index. Nonetheless, the Media index has shown improved momentum, presenting a favourable indication.
- In assessing market breadth, it has been observed that the number of stocks trading above their 10 and 20-day moving averages is showing initial indications of reversing from oversold levels and is presently positioned above the 50% threshold. This suggests a strengthening of their intermediate trend, which is a positive signal.
- Furthermore, the number of stocks trading above their 50 and 200-day moving averages remains significantly above their 50% and 70% thresholds, indicating robustness in their primary trends.
- The momentum breadth has significantly improved during the week. However, when compared to market breadth volume, it suggests that stock participation has seen improvement, albeit more selectively. Wider participation can further bolster the ongoing uptrend.
- From a technical standpoint, it is imperative to note that the level of 24075 serves as a critical pivotal support. Sustaining above this level will pave the way for the index to strengthen its bullish momentum. Furthermore, a robust weekly conclusion indicates the potential for the uptrend to extend towards the level of 25000 and 25300.
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