MarketQuadrant 02/2025

Weekly market outlook

→ No-money market
→ Anticipating a reversal day (but overall bearish continuation)
→ Stay in all-cash. Wait for a gap-down & undercut for reversal day trading.

⦿ Bias: Negative

⦿ Breadth: Weak & Oversold

⦿ Momentum: Negative & worsening

⦿ Swing: Confirmed Downswing

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Bias → Negative

After turning briefly positive last week, the bias is now negative.

• 52-week Net New Highs are negative for past 3 consecutive days.

• The Monthly (20-day) NNH are also negative for past 3 consecutive days.

• All indices are below the 50-day MA for past 3 consecutive days.

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Breadth → Weak & Oversold

█ Breadth with regard to extension: 

• The % of stocks above the 10-day MA & 20-day MA are below the 50% mark, & in oversold territory, with till some more scope to touch one-digit figures.

• The % of stocks above the 50-day MA stay below the 50% bullish threshold for 4 weeks now.

• The % of stocks above the 200-day MA are again below the 50% threshold. In the coming days, sustenance of these levels for more than a month can confirm the transition of the ongoing bull market into a bear one.

█ Breadth with regard to participation: 

• Stocks 15% up in 5 days have now dried down to historic lows. This shows that there is practically no broader market participation on the bullish side.

• Stocksgeeks MBI began this week with a red day, followed by a bounce, & progressively bearish days since then. We have ended the week with single digit 4R numbers, which are slightly higher than the ones we got on 6th Jan. The 20R & 50R numbers have turned red again, which indicates that we are in a downtrend on all timeframes. A gap-down open on Monday will set the stage for an immediate technical reversal.

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Momentum → Negative & worsening

• Most broad & sectoral indices are having negative & worsening momentum.

• IT is the only index with positive & improving momentum.

• FMCG & Oil/Gas have positive but worsening momentum.

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Swing  → Confirmed Downswing

• Most broad & sectoral indices are in a confirmed downswing.

• FMCG is still in a confirmed upswing. Auto, Pharma & Oil/Gas are in an early downswing. IT index is an early upswing.

• Swing Confidence is 0, which means that the portfolio should not be having any open risk.

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