Weekly Trend Report
- 30th September 2024
Week Gone By
The Indian frontline indices managed to end the week with decent gains as they continued to record new record highs during the week. The broader markets howeer remained under pressure during the period. The frontline gains was largely driven by the overall positive sentiment in the market. The key sectors contributing to the gains were Auto and Oil & Gas. The global markets also maintained a positive momentum, with the Asian indices being the star while the US markets made modest gains.
Week Ahead
Global market trends, exchange rate movement and crude oil prices will significantly influence the domestic market in the week ahead. FII & DII flow data will also be closely monitored by the participants. The Q2 current account data will be released on Monday, while the HSBC PMI data will be released on Tuesday. Key international economic data during the week consists of China’s PMI data, Eurazone Unemployment rates, US service PMI data, India service PMI and US Non-Farm payroll.
Technical Overview
- The benchmark index began the trading week with limited activity and remained relatively stable until mid-week.
- The early week’s potential accumulation resulted in a surge in price movement on Thursday, ending the week 388 points higher and reaching new all-time highs of 26277.
- Large-cap stocks displayed a positive divergence compared to mid and small-cap stocks, suggesting potential flows from the latter into the former.
- However, the week concluded with major broader and thematic indices confirming an uptrend, albeit with subdued positive momentum.
- Market breadth analysis indicated that stocks trading above their 10 and 20 daily moving averages retraced below the 50% threshold, while those trading above their 50 and 200 daily moving averages continued to trade above their mean levels. This suggests that the shorter-term trend remains subdued while the primary trend remains intact.
- The momentum market breadth remained largely positive, with the 5-day ratio trending above threshold levels, signalling favourable swing trading conditions.
- Market breadth volume remained subdued for most of the week, indicating selective stock participation. On the technical front, the zone of 26250-26280 represents crucial resistance.
- The index, while slightly extended, will require a decisive confirmation on closing above the zone for further trend continuation.
- The index holds immediate support near 25950. As long as the Nifty sustains above 25750, it is expected to continue attracting bullish strength.
- The swing confidence remains at 50, signifying that the portfolio can take half the permissible open risk.
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