Another hard-money week with still very few conventional breakout/pullback setups. Many setups that look good at EOD are squatting the next day or giving up their gains fast. What’s showing urgency is getting further extended. While many potential leaders have broken their 20 & even the 50MA, some of these are still holding their 10 & 20 MAs & are the ones to be looked up to next week.
Conservative swing traders still need to keep on waiting patiently. Aggressive swing traders are still better off with intraday trades only, as entering & holding new names in this environment is most likely to give them nothing but choppy action.
⦿ Bias: Bear
⦿ Trend: Uptrend
⦿ Swing: Early upswing
⦿ Momentum: Positive but worsening
Bias → Bear
From a long-term perspective, we remain in a bear market.
Over the past month, more than 50% of stocks have remained below their 200-day simple moving average (SMA). Hence, we stay in a bear market.
About 33% of all stocks are positioned above their 200-day simple moving average. This week's numbers are similar to those of last week's, and we remain well below the 50% mark.
When more than 50% of stocks go above their 200-day SMA, we will again enter a transitional market. If this percentage stays above 50 for a month, we will finally enter a bull market.
Indian markets have experienced three distinct bear phases since 2017: the Post-Euphoria Correction (31 months, 2018–2020), the Inflation & Rate Hike Pivot (16 months, 2022–2023), and the current Structural Bear (17+ months, Oct 2024–present). The current phase has already surpassed the 2022-23 correction, with less than 25% of stocks above their 200-day moving average.
Trend → Uptrend
The current market is in an uptrend.
The 52-week Net New Highs have remained consistently positive for the past three days. We are still in single digits, though.
Over the past three days, almost all broad indices (except the Nifty) stayed consistently above their 50-day moving averages. About 70% of all stocks have remained above their 50-day MAs.
The market will stay in an uptrend till the 52-week highs consistently stay above the 52-week lows, PLUS more than 50% of stocks remain consistently above their 50-day moving averages.
Swing → Early Upswing
The market is in an early upswing.
The MBI turned red on the first trading session of the week and swiftly turned green, again with subdued 4.5R numbers.
Most broad indices are not consistently below or above their 10-day MAs. About 54% of the stocks are trading above their 10-day moving averages.
Swing Confidence is 0, indicating that the portfolio should still not take any open risk.
Momentum → Positive but worsening
The overall market has positive but worsening momentum, as the momentum score is above the zero line but below its 9-period moving average.
There is no index with positive & improving momentum. All other positive indices (Capital market, Pharma, Power/Energy, Defence, Chemicals, Metal) are having worsening momentum, indicating that they are in one or the other stage of a pullback.
Indices with negative & worsening momentum include FMCG, Oil&Gas, PSE & Railways.
That’s all for this week. If you'd like to know when I publish something new, subscribe to my newsletter, and you'll receive the latest directly in your inbox.
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