• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Week Ahead: NIFTY To Stay Tentative Over 6-Day Trading Week; RRG Shows Defensive Sectoral Setup
Stock

Week Ahead: NIFTY To Stay Tentative Over 6-Day Trading Week; RRG Shows Defensive Sectoral Setup

by January 25, 2025
by January 25, 2025 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The Indian equities continued to trade with a corrective undertone as they ended the week on a mildly negative note. Over the past five sessions, the Nifty continued facing selling pressure at higher levels while staying mainly in a range. The markets remained in a very defined trading range and stayed decisively below key levels. The trading range widened a bit; the Nifty oscillated in 449.45 points before closing towards its lower end of the range. The volatility increased; the India VIX inched higher by 6.33% to 16.75 and stayed at elevated levels. While not showing any major reversal attempts, the benchmark index closed with a net weekly loss of 111 points (-0.48%).

The coming week will be a 6-day trading week. Both NSE and BSE shall conduct a special full-day trading session on Saturday, February 1, 2025, on account of the presentation of the Union Budget.As we commence a new week, it is important to observe that the markets remain decidedly below key levels. The Nifty Index is significantly below its 200-day moving average (200-DMA), which is situated at 23,984. Additionally, a Death Cross pattern has formed on the daily charts as the 50-day moving average (50-DMA) has crossed below the 200-DMA. On the weekly charts, we are also below the 50-week moving average (50-WMA) placed at 23,711. Consequently, even the most robust technical rebounds, should they occur, are likely to encounter resistance around the 23,700 level and higher. In summary, as long as the Nifty remains below the 23,500-23,650 range, it will likely be susceptible to profit-taking at elevated levels.

The levels of 23325 and 23500 are expected to act as potential resistance points in the coming week. The supports are at 22900 and 22650.

The weekly RSI is 40.71. It stays neutral and does not show any divergence against the price. The weekly MACD is bearish and trades below the signal line.

The pattern analysis of the weekly charts shows that the Nifty is now decisively below the 50-week MA at 23711. This means the key resistance level has been dragged lower to this point, even from a medium-term horizon. As evidenced on the chart, while the Nifty breached the 50-week MA, it also slipped below the support of the rising trend line pattern.

Overall, the markets will likely trade with a weak undertone over the immediate short-term. We are likely to see ranged markets with weak undercurrents through the week. However, we will likely see immense volatility on Saturday as we head into the Union Budget on February 1. The markets may see some risk-off sentiment playing out; this is likely to see the traditionally defensive sectors like IT, Pharma, FMCG, etc., doing well. We will also see some Budget-driven movement in a few select pockets. The markets shall fully digest the Budget the week after this one. It is strongly recommended to be very light on positions and keep leveraged exposures at modest levels. A highly cautious view is advised for the coming week.

Sector Analysis for the coming week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show a lack of leadership in the sectoral setup. The Nifty Realty, Banknifty, Financial Services Index, and the Midcap 100 Index are inside the leading quadrant. Except for the Midcap 100 Index, the rest are showing a decline in their relative momentum. However, these groups are likely to outperform the broader markets relatively.

The Nifty IT index has rolled inside the weakening quadrant. However, stock-specific performance may be seen from this space. The Nifty Pharma and the Services Sector Indices are also inside the weakening quadrant.

The Nifty Metal, Media, PSE, Energy, FMCG, Consumption, and Commodities Indices are inside the lagging quadrant. Most of these sectors are showing sharp improvement in their relative momentum.

The Nifty Auto has rolled inside the improving quadrant, and the Nifty Infrastructure and PSU Bank Indices are also inside the improving quadrant. However, the PSU Bank Index is seen sharply giving up on its relative momentum.

Important Note: RRG™ charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.  

Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

You Might Also Like
  • A Fresh Look at Precious Metals
  • MEM TV: Recession Fears Drive Sector Rotation
  • Ignore The Naysayers, This Market Is On FIRE!!!
  • The Halftime Show: Are Oversold Conditions Real? The Bullish Percent Says So
Share
0
FacebookTwitterPinterestWhatsapp

previous post
BEWARE! META, TSLA, AMZN, MSFT & AAPL Report Earnings Next Week!
next post
Target rolls back DEI initiatives, the latest big company to retreat

You may also like

Strength Off the Lows, But Concerns Remain

August 15, 2024

Sector Rotation Model Flashes WARNING Signals

June 12, 2024

The Top Five Charts of 2023

December 23, 2023

The Case for a Tactical Stock Selloff

January 17, 2024

What Can We Expect from Stagflation?

April 27, 2023

Rules-Based Money Management – Part 2: Measuring the Market

April 25, 2024

Silver’s Surge is No Fluke—Here’s the Strange Ratio Driving It

June 6, 2025

With The Top 10 Picks In The Stock Market DRAFT,...

February 19, 2024

Week Ahead: Despite Pullback, Breadth Remains A Concern; Nifty Stays...

June 8, 2024

Sector Spotlight: Energy & Tech’s Opposite Seasonal Rotations

July 31, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,451 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Bonds Like to Move It: How...

    April 12, 2023

    Look Out Below! The Bear Case...

    March 23, 2024

    The Stock Market’s Comeback: Key Takeaways...

    May 16, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here