MarketQuadrant 31/2025
Weekly market outlook
We are witnessing worsening momentum in a downswing within a sideways transitional market.
A hard-money environment with stock-specific follow throughs. Conservative swing portfolios should stay in cash, as they have been for the past couple of weeks.
⦿ Bias: Transitional (bear to bull) market
⦿ Trend: Sideways
⦿ Swing: Downswing
⦿ Momentum: Negative and worsening
Bias → Transitional (Bear-to-Bull)
From a long-term perspective, we are now transitioning from a bear to a bull market.
After staying below the 200-day simple moving average (SMA) for 27 weeks, more than 50% of the stocks moved up the 200 SMA two weeks back, and the market can now be said to have entered the third week of a bear-to-bull transitional phase. For the past 2 weeks, more than 50% of the stocks have stayed below their 200 SMA.
Less than 40% of stocks are positioned above their 200-day simple moving average.
When the percentage of stocks above the 200-day SMA remains above 50 for at least a month, we will be in a bull market. If, instead, it stays below 50 for a month, we will return to a bear market.
Trend → Sideways
The market trend has stayed sideways for the past two weeks.
52-week Net New Highs have remained consistently positive for the past three days. Both the new 52-week lows and the new 52-week highs appear to have stalled at just minuscule positive values.
Over the past three days, most major indices have remained consistently below their 50-day moving averages, with approximately only 30% of stocks staying above their 50-day moving averages.
The trend will turn negative again if the 52-week highs go below the 52-week lows and more than 50% of stocks stay below their 50-day moving averages.
Swing → Downswing
The market has been in a downswing for the past two weeks.
Other than one dead-cat bounce, the MBI stayed red for most of the days this week. A little more red, and we will be approaching near oversold levels.
All broad indices remained consistently below their 10-day moving averages. Less than 50% of stocks are trading above their 10-day moving averages, and, not favoring the bulls, fewer stocks are above their 10-day moving average than their 20-day moving average.
Swing Confidence stays 0, indicating that the portfolio should not take on any open risk.
Momentum → Negative & worsening
All broad indices now have negative and worsening momentum, as the momentum score is below the zero line and its 9-period moving average.
Most sectoral indices also exhibit negative and worsening momentum. FMCG is the only index with positive momentum.
Ecom, EMS, Agrochem, AMC, and Engines are notable custom indices with positive momentum.
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