DeepDive Week 1, 2025: Let’s start our first ever weekly stock market hike!
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MARKET BREADTH
Courtesy: ChartInk
Week 1 witnessed new buying that took the indices from ‘oversold’ zone to ‘mildly bought’ zone. Nifty50 Index reverses after making a low near 23,460 level. The 700 points rally faced some rejection from the overhead 50D EMA. Nifty closed around 24,000 level just taking some support at the 21D EMA. Some of the stocks moved really well in this short rally. Let’s see a few of them.
MOMENTUM STOCKS FROM TRENDING THEME
One of the top performing sector in the opening week of 2025 was ‘Electronics & Manufacturing Services (EMS)’. It is also closely related to the ‘Heating, Ventilation and Air Conditioning (HVAC)’ sector, that showed similar outperformance. The outperformance of these sectors is not just limited to Week 1, but it can also be traced by you during the previous calendar year 2024-25. Do this homework!
Following are the technical charts of the leading stocks from EMS/HVAC sectors:
Technical Chart: Amber Enterprise as on 03.01.2025 (Source: TradingView)
Amber Enterprise broke out above 6500 price level during the last week of 2024, and since then it has been showing tight price action in a ‘flag’ like pattern. Further breakout above 8000 price level can take the stock to new higher territories, or any breakdown below the lower flag channel can pull the stock back to lower levels. Let’s see what lies ahead for the stock, in the next week.
Technical Chart: Kaynes Technology as on 03.01.2025 (Source: TradingView)
Kaynes made a ‘shakeout candle’ on the opening day of the week i.e. 30th Dec’24. It reversed from 21D EMA and broke out above a small tight base. However, the follow-day volumes were missing. Though the price action at high levels are witnessing some long higher wicks, a sign of sellers getting active. Needless to mention, the stock is currently in a clear cut uptrend, making higher high and higher lows.
Technical Chart: Epack Durables as on 03.01.2025 (Source: TradingView)
Epack opened the week with a ‘break away’ gap on Monday (Week 1, 2025) from a ‘cup and handle’ consolidation pattern, and kept pulling higher during the entire week. It made a move of around 23% in this week. Any further extension without a pause can trigger strong profit booking. Can you spot a similar ‘cup and handle’ breakout in the chart?
Technical Chart: PG Electroplast Ltd. as on 03.01.2025 (Source: TradingView)
PGEL witnessed narrow range consolidation during the respective week. The prior rally from 680 to 1000 price levels is getting digested by the stock. Is this narrow price action a breather before the next rally, or distribution at higher levels? That will get untold in the following week i.e. Week 2.
Technical Chart: KRN Heat Exchange as on 03.01.2025 (Source: TradingView)
KRN is a recently listed stock from the same HVAC & Consumer Durable space. During the week, as the entire sector was strong, KRN moved 9% on Wednesday, when it broke out above 750 price level (from a horizontal channel it created in the low range of the consolidation). Later in the week, it tested the resistance near 820 price level. Look at the volume action. Isn’t it supportive for it to hold above 750 price level or will the weakness in the indices pull it back?
SOME OTHER POWERFUL STOCKS
Technical Chart: Orient Technologies as on 03.01.2025 (Source: TradingView)
OrientTech, a fairly recent IPO stock, broke out from classic ‘volatility contraction pattern’ (VCP), as Mark Minervini calls it. It closed the week on a very strong price advance of 7% on Friday. The stock price action looks very bullish on the charts.
Technical Chart: Firstsource Solution Ltd. as on 03.01.2025 (Source: TradingView)
FSL gave a breakout from a 'base on base’ consolidation. Stock is among the top percentile from the IT sector. Similar to OrientTech (above), the price action in FSL was rock solid, as it sustained above the breakout price level of 385, on the weekly close. The IT giant - TCS, will post its quarterly numbers in the coming week, giving a direction to the overall IT sector.
Technical Chart: TajGVK Hotels as on 03.01.2025 (Source: TradingView)
TajGVK gave a very long base-breakout, on Wednesday, above 400 price level. On the breakout day, price moved +15%. Look at the volumes on breakout candle, and the follow-through days. Bang on! Week closed on a 3.5x volume of its 20 weekly average volume. This is indicative of institutional buying. Stock broke out above a very long base. Do a self-learning exercise, visit the ‘weekly’ chart of this stock, and find out how long was the consolidation phase till this breakout?
Technical Chart: Shakti Pumps as on 03.01.2025 (Source: TradingView)
Shakti Pumps is the top performing stock out there currently, period. Since the start of Dec’24, the stock has moved +55%. This is a very significant move in 5 weeks. Such a move is usually when the stock breaks out above the long-range price consolidation. The longer the base, the more likely is the possibility of an explosive breakout. Calculate how long was the base in the chart above? The stock is currently trading in the territory of extended price levels.
Technical Chart: Innova Captab as on 03.01.2025 (Source: TradingView)
InnovaCap showed a V-shaped recovery from its support near 970 price level. Later in the week, it breaks out above the decent 4-5 weeks long consolidation base. It is quite difficult to trade such patterns, as it requires a lot of experience and nuances of price action at key pivots. It is not necessary for stocks to make a cup and handle pattern everytime, before the breakout. It can simply form the ‘cup’ (without the handle), as can be seen in this chart. Such patterns are usually more bullish!
