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February 17, 2025

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Week Ahead: NIFTY Tests Crucial Support; Violation Of This Level May Invite Incremental Weakness

4 Mins Read

The Indian equity markets remained under pressure over the past five sessions, witnessing sustained weakness throughout the week. The Nifty50 faced resistance at key levels and struggled to find strong footing as it tested crucial support zones on two separate occasions. Market volatility surged significantly, with India VIX rising by 9.72% to 15.02, signaling heightened uncertainty. The index moved within a wider-than-usual trading range of 793.75 points, reflecting increased turbulence. By the end of the week, the Nifty had recorded a net weekly loss of 630.70 points, equivalent to a decline of 2.68%.

The upcoming week holds significant importance as the index approaches critical technical levels. The 22,800 mark is particularly crucial, as any decisive violation of this support is likely to invite further downside pressure. On the upside, strong resistance is expected at 23,500 and higher levels, making it unlikely for even the best technical rebounds to extend beyond this point. The market’s reaction to the 22,800 level will play a vital role in determining its short-term trajectory. A breach of this level could open the door to additional weakness, intensifying selling pressure.

Given the prevailing conditions, the new trading week may witness a subdued start. The immediate resistance levels are expected to emerge at 23,150 and 23,400, while key support levels are positioned at 22,700 and 22,450. These levels will serve as crucial markers in assessing the index’s directional bias over the next few sessions.

From a technical perspective, the Relative Strength Index (RSI) on the weekly chart stands at 40.40, forming a 14-period low and displaying a clear bearish divergence. This signals weakening momentum and suggests that market sentiment remains fragile. Additionally, the weekly Moving Average Convergence Divergence (MACD) indicator is bearish, as it trades below the signal line, further confirming the downtrend.

A detailed pattern analysis indicates that the Nifty faced resistance at the 50-week moving average and subsequently resumed its downward movement. The inability to sustain gains above this crucial moving average reinforces the broader weakness in the market structure. If the index slips below 22,800, it could trigger further declines, potentially leading to deeper corrections in the near term.

Market participants should approach the coming sessions with heightened caution, considering the overall technical setup. The 22,800 level remains a key pivot, and any decisive breach could accelerate selling pressure. Given the prevailing conditions, it is advisable to use any technical rebound as an opportunity to protect profits rather than aggressively chase fresh long positions. New buying should be undertaken selectively, with a strong emphasis on risk management. Leveraged exposures should be kept at modest levels to navigate the increased volatility effectively. With market sentiment appearing fragile and downside risks persisting, a highly cautious approach remains warranted in the near term.

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 that the Nifty Financial Services index has rolled back inside the leading quadrant. Besides this, the Nifty Bank Index is the only index that is inside the leading quadrant. These groups may continue to outperform the broader markets relatively.

The Nifty Services Sector Index and the Pharma Index are inside the weakening quadrant. However, they are seen improving on their relative momentum. Apart from this, the Midcap 100 and the IT index are inside the weakening quadrant.

The Media Index continues languishing inside the lagging quadrant along with the PSE and the Realty Index. They may relatively underperform the broader markets. The Energy Sector Index is also inside the lagging quadrant, but its relative momentum is improving.

The Nifty Commodities, Consumption, FMCG, Auto, and the Metal index are inside the improving quadrant. They may continue improving their relative performance against the broader markets. The PSU Bank index is also inside the improving quadrant, but it is seen sharply giving up on its relative momentum, and it is expected to underperform the broader Nifty 500 index relatively.

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

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In World news

South Korean actor Kim Sae-ron dead at 24

3 Mins Read

South Korean actor Kim Sae-ron was found dead at her home in Seoul on Sunday, nearly two years after she retreated from the public eye following a drunk driving conviction. She was 24.

Kim began her career as a child actor and gained widespread recognition, including an appearance at the Cannes Film Festival, for her role as a girl abandoned at an orphanage in 2009 movie “A Brand New Life.”

She later starred in 2010 action hit “The Man from Nowhere,” 2012 mystery thriller “The Neighbors,” and 2014 drama “A Girl at My Door,” among numerous roles in film and television.

But Kim’s career had stalled since April 2023 after a Seoul court found her guilty of driving under the influence when she crashed her car in the South Korean capital a year earlier. Kim avoided jail but was fined about $14,000.

Her last known role was in Netflix’s 2023 K-drama “Bloodhounds.”

The final post on Kim’s Instagram account, a photo of the actor shared in January, has accumulated more than 205,000 likes. Comments are disabled on the account.

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    Korean celebrities paid tribute to Kim following the news of her death.

    “May you rest in peace,” actor Kim Ok-bin wrote on Instagram alongside a photo of a white chrysanthemum, a symbol of grief in many Asian cultures.

    Kim’s co-star Kim Min-che shared a photo of a scene from “The Neighbors” on Instagram and said: “I was so happy to meet you as my daughter in the movie. May you rest in peace.”

    Recent deaths of young K-pop idols and K-drama stars have highlighted ongoing concerns about mental health and pressures in South Korea’s entertainment industry.

    Song Jae-lim, a former model who rose to prominence in K-dramas, was found dead in his apartment last November at age 39. ASTRO boy band member Moon bin died last year at age 25. K-pop singer and actress Sulli was also 25 when she died in 2019. And two years earlier, boyband SHINee’s Kim Jong-hyun was found dead at his home at age 27.

    Entertainment agencies have implemented various mental health support systems, including counseling services and more flexible schedules, but observers say the highly competitive nature of K-entertainment, combined with intense public scrutiny, and expectations of perfection in appearance and behavior, are affecting stars.

    This post appeared first on cnn.com

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    In Business

    Grocery stores are rationing eggs as supply falls and prices rise

    4 Mins Read

    Egg rationing is here.

    With prices rising rapidly and showing no signs of slowing anytime soon, some of the nation’s biggest grocery store chains — including Trader Joe’s, Walmart and Costco — have begun limiting the amount of eggs individual consumers can buy.

    This time last year, the average price for a dozen eggs was around $3, according to the Bureau of Labor Statistics. By last month, it had risen to around $5.

    And egg prices are expected to climb this year by 20.3 percent, according to the latest outlook from the U.S. Department of Agriculture. 

    Market analysts blame the price hikes on the highly infectious bird flu that has decimated the chicken population and reduced egg supplies during the winter holiday season, when the demand is strong. More than 13 million hens have been lost or slaughtered since December as a result of the bird flu outbreak, according to the Agriculture Department’s latest Egg Markets Overview.

    Trader Joe’s is dealing with the shortages by limiting the amount of eggs customers can buy.

    “Due to ongoing issues with the supply of eggs, we are currently limiting egg purchases to one dozen per customer, per day, in all Trader Joe’s stores across the country,” a spokesperson said in a statement. “We hope these limits will help to ensure that as many of our customers who need eggs are able to purchase them when they visit Trader Joe’s.”

    Walmart is limiting bulk buyers to two 60-count cartons per purchase “to help ensure more customers can have access to eggs,” a spokesperson said.

    “Although supply is very tight, we’re working with suppliers to try and help meet customer demand, while striving to keep prices as low as possible.”

    There are no restrictions on purchasers of smaller quantities of eggs, the spokesperson said.

    At Sam’s Club, purchasers are allowed to buy two cartons of each brand of eggs on the shelves, a spokesperson said.

    But at Kroger and Aldi there is a two dozen eggs per trip limit, while Whole Foods and Costco are capping egg purchases at three one-dozen cartons per person in select stores.

    A sign asks customers to limit their purchases of eggs at a grocery store Monday in South Pasadena, Calif. Frederic J. Brown / AFP – Getty Images

    Meanwhile, the White House found itself taking flak again from Democrats demanding that President Donald Trump fulfill his campaign promise to immediately start reducing the price of groceries.

    “Over the last several weeks, you have done nothing to address these rising costs,” the Congressional Dads Caucus said in a letter Thursday to Trump. “Moreover, your flurry of executive actions has hampered the government’s response to effectively address the underlying causes of this crisis. Eggs are a basic necessity for families in our districts, and the financial burden caused by these surging prices must be resolved.”

    In some areas of New York, “the average price of a dozen eggs has reached more than $8 in some stores,” said Tony Hernandez, spokesperson for Rep. Jimmy Gomez, D-Calif., who leads the group that fired off the letter.

    In response to the harsh criticism from congressional Democrats, a White House spokesperson, Anna Kelly, blamed the egg crisis on the ‘Biden Administration’s slow and ineffective response to the bird flu outbreak, which began in 2022.’

    “Moms and dads across the country gave President Trump a mandate to take every action to drive down costs, and he is delivering,’ Kelly said in emailed statement.

    Trump and Brooke Rollins, who is the president’s pick to head the Agriculture Department, ‘will refocus the USDA’s Animal and Plant Health Inspection Service (APHIS) on its core mission: protecting the health of the United States’ plants, animals, and natural resources,’ Kelly wrote.

    In New York City, some bodegas have taken to selling eggs one at a time because their customers can’t afford to shell out $10 or more to buy a dozen eggs, a price that is not unusual in the very expensive city.

    “These people don’t have enough money to buy a dozen eggs, so I have to sell them separately,” Fernando Rodriguez, 62, owner of Pamela’s Green Deli in The Bronx, told the New York Post.

    This post appeared first on NBC NEWS

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