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The Nifty traded in a broadly sideways and range-bound manner throughout the previous week and ended the week with a modest decline. The Index oscillated within a narrow 276-point range, between 25144.60 on the higher end and 24918.65 on the lower end, before settling mildly lower. The India VIX declined by 3.60% over the week to 11.39, suggesting continued complacency in the markets. On a weekly basis, Nifty ended with a net loss of 181.45 points or (-0.72%).

The Nifty is presently consolidating just below a key resistance zone after attempting a breakout above a rising channel. This zone, between 25100 and 25350, has proven to be a supply area where profit-taking has emerged. While the broader trend remains intact and the Nifty is above key moving averages, it is still within a complex zone of consolidation. This pause in momentum comes after a sharp up move from the lows near 21743 in April. A strong breakout above the 25265 –25350 zone, with a closing confirmation, may resume the uptrend. Conversely, a sustained move below 24750 could trigger incremental weakness and drag the Nifty towards lower supports.

 As we head into the new week, the markets may see a cautious start amid the current range-bound setup. The immediate resistance is at 25150, followed by 25400. On the lower side, the key support zones are placed at 24750 and further near 24380.

The weekly RSI stands at 56.54 and remains neutral without showing any divergence against price. It has made a fresh 14-period low, which is bearish. The MACD remains above its signal line on the weekly chart, continuing to indicate a positive crossover. No significant candlestick formation was observed for the week.

From a pattern analysis perspective, Nifty is trading just below the upper bound of a rising channel that it had briefly broken out of. With the Index slipping below the support levels of 25000-25150, it faces resistance at this zone again, failing to follow through on the breakout. Price action is still above the 20-week and 50-week moving averages, maintaining a bullish undertone from a medium-term perspective. However, the ongoing sideways action indicates a lack of fresh directional conviction.

Given the current technical structure, it would be prudent for traders to remain selective and protect profits at higher levels. The markets are not displaying signs of aggressive strength, and unless there is a convincing move above 25350, a stock-specific approach with tight risk management is advised. Traders may avoid aggressive fresh buying until a directional move is clearly established. Cautious optimism, with a focus on stocks exhibiting stronger relative strength, is the ideal approach for the coming week.

Sector Analysis for the coming week

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

Relative Rotation Graphs (RRG) show that the Nifty Media and the Metal Index have rolled inside the leading quadrant. The Midcap 100, Realty, and PSU Bank Index are also inside the leading quadrant. These groups are likely to relatively outperform the broader Nifty 500 Index.

The Nifty Bank, PSE, and the Financial Services Index are inside the weakening quadrant. They may experience a decline in relative performance compared to the broader markets.

The Nifty Services Sector Index, Pharma, Consumption, and the FMCG Index continue to languish inside the lagging quadrant. Among these groups, the Pharma Index shows improvement in its relative momentum against the broader markets.

The IT Index is inside the improving quadrant; it continues to improve its relative momentum against the benchmark. The Auto Index, which is also inside the improving quadrant, is seen deteriorating in 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

Sector Rotation Stalls, Tech Remains King

Despite a slight rise in the S&P 500 over the past week, the sector rotation landscape is presenting an intriguing picture. For the first time in recent memory, we’re seeing absolutely no changes in the composition of the sector ranking — not just in the top five, but across the board. Will this stability kick off a return to a period of more significant trends in relative strength and a return to outperformance for the portfolio?

1. (1) Technology – (XLK)
2. (2) Industrials – (XLI)
3. (3) Communication Services – (XLC)
4. (4) Financials – (XLF)
5. (5) Materials – (XLB)
6. (6) Utilities – (XLU)
7. (7) Consumer Discretionary – (XLY)
8. (8) Consumer Staples – (XLP)
9. (9) Real-Estate – (XLRE)
10. (10) Energy – (XLE)
11. (11) Healthcare – (XLV)

Technology

The tech sector continues to flex its muscles, moving up on the price ratio scale while maintaining a stable momentum around 103. This sustained strength is a clear indication that tech remains the sector to beat in the current market environment.

On the daily RRG, we’re seeing a nice rotation backup for tech while inside the weakening quadrant, a sign of strength that confirms the move on the weekly RRG. The raw RS line for tech is climbing almost straight up, reflecting very strong RRG lines. There might be a slight loss of momentum, but make no mistake, tech is still the strongest player in the game.

Industrials

Industrials is currently rotating out of the leading quadrant and sits on the verge of moving into weakening. However, it’s crucial to note that it still holds the second-highest rank based on the RS ratio. This positioning suggests that the odds for a rotation back up towards the leading quadrant are still in play.

The daily RRG shows industrials confirming its strength with a move further into the leading quadrant, moving up on the RS ratio scale while keeping stable momentum.

After breaking out of overhead resistance, the price chart continues higher, and a new higher low is visible on the relative strength line. This keeps the RS ratio line at elevated levels, though the RS momentum line is still moving lower just above 100. If this RS line can maintain a series of higher highs or higher lows, I expect the RS momentum line to bottom out soon and follow the RS ratio higher.

Communication Services

The communication services sector is positioned inside the weakening quadrant on the weekly RRG but has hooked back to the left and is now even lower on the RS ratio scale. It’s moving towards the lagging corner, which is a concerning trend for its top 5 position.

On the daily RRG, communication services have moved into the lagging quadrant. It has started to slow down on the negative momentum, but we need a rotation back up on this daily RRG into the improving quadrant and back to leading to have that weekly tail curl back up to its leading quadrant as well.

The price chart shows the sector holding up after breaking higher, with a pullback now finding support at the level of old resistance, respecting the rule that old resistance is expected to work as support going forward. The problem child here is the raw RS line, which has fallen below its rising support line. This is taking its toll on the RRG lines, with both RS ratio and RS momentum rolling over and starting to move down.

Financials

Financials are inside the lagging quadrant on the weekly RRG, moving at a negative heading. This means that a significant amount of strength is needed from the daily tail to keep this sector within the top five.

On the price chart, financials are playing around with overhead resistance around 52, with a small consolidation area and a pennant-like formation suggesting more upside potential on the price chart.

However, this is not confirmed on the relative strength chart, where the RS line has broken its rising trend and is moving lower.

Materials

Materials are also inside the lagging quadrant on the weekly RRG and traveling a negative heading, like financials. Here, also, strength is needed from the daily teams to keep the sector inside the top five.

Materials are holding up on the price chart after a break that could be described as a head-and-shoulders reversal pattern. The relative strength line remains contained within the boundaries of its falling channel, but hugging the falling resistance line.

We need a break higher to turn that trend around. Only an upward breakout of that relative downtrend will turn the RRG lines around and provide a lifeline for materials to maintain its position inside the top five.

Portfolio Performance

The portfolio continues to lag the S&P 500, currently sitting around 8% behind. It seems to be stabilizing for now, but it’s not exactly what we want, of course. A drawdown of around 8-10% is not unprecedented, based on historical backtests; however, it’s somewhat disappointing that it occurs right when we begin operating in a semi-live environment.

That said, the fact that we’re now stable with no changes after a period of significant volatility over recent months could be a sign that we’re ready to enter a new period with stable relative trends that can bring the portfolio back to outperformance.

#StayAlert and have a great week. –Julius

The stock market feels like it’s holding its breath ahead of Big Tech earnings. The first two days of the trading week were mostly quiet, but Tuesday gave us a few nuggets worth chewing on.

The S&P 500 ($SPX) squeaked out another record close, up by a modest +0.06%. It’s barely a blip, but it keeps the uptrend intact.

Tech momentum slowed down a tad, but we didn’t see a wave of selling. It was more like a little profit-taking after a strong run. No reason to hit the panic button just yet.

StockCharts Tip: Head to the Market Summary page and take a glance at the Market Factors panel. On Tuesday, Large-Cap Growth and Large-Cap Momentum were the only factors in the red (see image below).

FIGURE 1. MARKET FACTORS PANEL IN THE MARKET SUMMARY PAGE. Here you see the one-day performance metrics of the factors. You can change the timeframe using the dropdown menu at the top of the page. Image source: StockCharts.com. For educational purposes.

In the US Sectors panel in the Market Summary page, Technology was the lone S&P 500 sector that finished lower. Tuesday’s action can be seen in the StockCharts MarketCarpet of the S&P 500, based on a one-day performance.

FIGURE 2. MARKETCARPET FOR THE S&P 500. The Technology sector took a bit of a hit on Tuesday, but other sectors saw gains. Image source: StockCharts.com. For educational purposes.

The big names — NVIDIA (NVDA), Microsoft Corp. (MSFT), Amazon.com (AMZN), Meta Platforms (META), and Broadcom (AVGO) — were all in the laggard camp. This pause in tech stocks comes right before a wave of Big Tech earnings.

Some of the big tech companies reporting earnings this week are Alphabet, Inc. (GOOGL), Tesla, Inc. (TSLA), and International Business Machines (IBM). All three report on Wednesday after the close. If GOOGL and TSLA come in hot with solid numbers and upbeat guidance, the S&P 500 and Nasdaq Composite ($COMPQ) could catch a tailwind. (Fun fact: both stocks closed higher on Tuesday.)

Despite Tuesday’s tech wobble, major support levels are holding. The Nasdaq Composite remains comfortably above its 20-day exponential moving average (EMA), and breadth is improving (see chart below).

FIGURE 3. DAILY CHART OF THE NASDAQ COMPOSITE. The index is above its 20-day exponential moving average, and market breadth is improving. Chart source: StockCharts.com. For educational purposes.

Small Caps Still in the Game

We’re also seeing small-cap stocks rising. When small-caps participate in the market’s upside move, it’s an indication of a healthy stock market. Healthcare stocks represent a significant portion of the small-cap indexes, which explains why Health Care was the top-performing sector on Tuesday. 

Another area that stole the spotlight was homebuilders. The SPDR S&P Homebuilders ETF (XHB) broke above its 200-day simple moving average (SMA), a positive sign for the struggling industry group (see chart below). Its Relative Strength Index (RSI) indicates that momentum is relatively strong.

FIGURE 4. SPDR S&P HOMEBUILDERS ETF (XHB). The ETF broke above its 200-day simple moving average, and momentum is relatively strong. XHB has underperformed SPY over the last year. Chart source: StockCharts.com. For educational purposes.

Over the last year, XHB has lagged the SPDR S&P 500 ETF (SPY) by roughly 18%. Strong earnings from DR Horton, Inc. (DHI) and PulteGroup, Inc. (PHM), however, have given the group a welcome boost, even with a soft housing backdrop. We’ll get the June Existing Home Sales data on Wednesday. A stronger-than-expected report could add fuel to XHB’s rally.

StockCharts Tip: The XHB chart above is part of the  Market Summary ChartPack, which is free for StockCharts subscribers. Install it, and you’ll have a ready-to-use list of charts for days like this.

Also worth a peek is the U.S. Dow Jones Home Construction Index ($DJUSHB), which topped the Dow Industries list (check the US Industries panel in Market Summary and hit the Dow Industries tab).

Gold and Silver Nudge Higher

While tech cooled and home builders heated up, precious metals prices climbed higher. Gold ($GOLD) rose 0.92% and silver ($SILVER) gained 0.94%. Gold sits just under its all-time high, and silver is back to levels we haven’t seen since 2011.

The Big Picture: Still a Healthy Market Environment

None of Tuesday’s actions suggests a crack in the market’s growth story. We are in the thick of earnings season, and that always brings uncertainty and volatility. Expectations are high for Big Tech, especially in light of a weaker dollar. Stay patient, watch the price action, and let the charts guide your next move.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Markets don’t usually hit record highs, risk falling into bearish territory, and spring back to new highs within six months. But that’s what happened in 2025.

In this special mid-year recap, Grayson Roze sits down with David Keller, CMT, to show how disciplined routines, price-based signals, and a calm process helped them ride the whipsaw instead of getting tossed by it. You’ll see what really happened under the surface, how investor psychology drove the swings, and the exact StockCharts tools they leaned on to stay objective. 

If you’re focused on protecting capital, generating income, and sleeping well at night while still capturing the upside, this is a must-watch. Discover which charts deserve your attention now, what to ignore, and how to prep for the back half of 2025. 

This video premiered on July 23, 2025. Click on the above image to watch on our dedicated Grayson Roze page on StockCharts TV.

You can view previously recorded videos from Grayson at this link.

The chart of Meta Platforms, Inc. (META) has completed a roundtrip from the February high around $740 to the April low at $480 and all the way back again.  Over the last couple weeks, META has now pulled back from its retest of all-time highs, leaving investors to wonder what may come next.

Is this the beginning of a new downtrend phase for META?  Or just a brief pullback before a new uptrend phase propels META to new all-time highs?

Today we’ll look at two potential scenarios, including the double top pattern and the cup and handle pattern, and share which technical indicators and approaches could help us determine which path plays out into August.

The double top scenario basically means that the late July retest of the previous all-time high was the end of the recent uptrend phase.  The double top pattern is literally when a major resistance level is set and then retested.  The implication is that a lack of willing buyers means the uptrend is exhausted, and there is nowhere to go but down.

While the 21-day exponential moving average is currently in play for META, I would say that a break below the 50-day moving average could confirm this as the correct scenario.  If that smoothing mechanism does not hold, then the price action would imply less of a pullback and more like the beginning of a real distribution phase.

What is META pulls back but then resumes an uptrend phase, leading META to another new all-time high?  That would result in a confirmed cup and handle pattern, created by a large rounded bottoming pattern followed by a brief pullback.  The key to this pattern is the “rim” of the cup, which sits right at $740 for META.

Given the pullback META has demonstrated so far in July, I would say that a break above the $740 level would basically confirm a bullish cup and handle pattern.  That would suggest much more upside potential for META, as the stock would literally go into previously uncharted territory.

So how can we determine which scenario is more likely to play out?  This is where we need to incorporate more technical indicators into the discussion, as a way to further validate and confirm our investment thesis.

Just to review, I think a break above $740 would confirm a bullish cup and handle pattern.  I would also say that a break below the $680 level, which would represent a move below the 50-day moving average as well as the June swing lows, would basically confirm a bearish double top pattern.

We can also use the Relative Strength Index (RSI) to help determine whether META remains in a bullish trend phase.  During bull phases, the RSI rarely gets below 40, because buyers usually step in to “buy the dips” and keep the momentum fairly constructive.  So if the price would break down, and the RSI would not hold that crucial 40 level, that could mean a bearish outlook is warranted.

Finally, we can use volume-based indicators to assess whether moves in the price are supported by stronger volume readings.  Here I’ve included the Accumulation/Distribution Line, which tracks the trend in daily volume readings over time.  We can see that the high in July resulted in a divergence, as the A/D line was trending lower.  If the A/D line would break below its June and July lows, marked by a dashed red line, that would represent a bearish volume reading for META.

Technical analysis is less about predicting the future, and more about determining the most probable scenarios based on our analysis of trend, momentum, and volume.  I hope this discussion shows how the outlook for META can be easily determined and tracked using the best practices of technical analysis!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.