Weekly Technical Signal Overview

Between 22 and 26 December 2025, a total of 110 technical signals were recorded, comprising 38 bullish and 72 bearish indications. The bullish signals were primarily driven by 20 golden cross patterns and 18 gap up openings, while bearish signals were dominated by 69 death cross patterns and 3 gap down openings. Notably, no fall-from-peak patterns were observed, suggesting that many stocks maintained proximity to recent highs without significant profit-taking or sharp corrections.

Market breadth leaned bearish, with the death cross—a bearish moving average crossover where the 50-day moving average crosses below the 200-day moving average—accounting for the majority of negative signals. Conversely, the golden cross, a bullish counterpart where the 50-day moving average crosses above the 200-day moving average, featured prominently among the positive signals.

Understanding Key Technical Patterns

The golden cross is widely regarded as a bullish indicator, signalling potential upward momentum when the short-term 50-day moving average surpasses the longer-term 200-day moving average. Historically, this pattern has been associated with sustained rallies, especially when confirmed by volume. The death cross, in contrast, signals potential downtrends as the 50-day moving average dips below the 200-day moving average, often preceding periods of weakness.

Gap trading involves significant price gaps at market open compared to the previous close. A gap up can indicate strong buying interest or positive news, while a gap down often reflects negative sentiment or adverse developments. Volume confirmation is crucial to validate these gaps as meaningful signals. The absence of any fall-from-peak signals this week suggests that stocks have largely avoided sharp declines from recent highs, indicating a degree of resilience despite bearish technical cues.

Market Cap and Sector Breakdown

Examining signals by market capitalisation reveals a bearish tilt among smaller stocks. Large-cap stocks showed a balanced distribution with 3 bullish and 3 bearish signals, reflecting mixed technical momentum among blue-chip names. Mid-cap stocks leaned bearish with 3 bullish versus 6 bearish signals, while small-cap and micro-cap stocks exhibited a more pronounced bearish bias. Small-caps recorded 24 bullish and 33 bearish signals, and micro-caps had 8 bullish against 30 bearish signals.

Sector-wise, the Realty sector was evenly split with 4 bullish and 4 bearish signals, indicating consolidation. The Computers - Software & Consulting sector showed a bullish inclination with 5 bullish signals out of 7, suggesting strength in technology-related stocks. Conversely, Auto Components & Equipments and Pharmaceuticals & Biotechnology sectors were notably bearish, with 5 bearish signals each, signalling sector-specific pressures. Non Banking Financial Companies (NBFCs) also leaned bearish with 4 bearish against 3 bullish signals.

Featured Technical Breakouts and Patterns

Among the 20 golden cross signals, notable large-cap stocks include Infosys Ltd and United Spirits Ltd, both in sectors demonstrating relative strength. Mid-cap names such as Central Bank of India and L&T Technology Services Ltd also featured bullish moving average crossovers. Small-cap and micro-cap stocks with golden cross patterns include Automotive Axles Ltd and Avanti Feeds Ltd, reflecting pockets of momentum in industrial and FMCG segments.

On the bearish side, death cross patterns were prevalent in large-cap stocks like Zydus Lifesciences Ltd, Hindustan Unilever Ltd, and Adani Enterprises Ltd, highlighting technical weakness in pharmaceuticals, FMCG, and diversified sectors. Mid-cap and small-cap stocks with death crosses spanned sectors such as cement, electronics, pharmaceuticals, and auto components, underscoring broad-based technical challenges.

Gap up openings were observed in 18 stocks, including Ambuja Cements Ltd and GE Vernova T&D India Ltd, signalling positive overnight developments or strong buying interest at the open. Gap down openings were limited to 3 stocks, including Elitecon International Ltd and DCM Shriram Industries Ltd, reflecting isolated negative sentiment.

Why These Patterns Matter

The predominance of death cross signals this week suggests a cautious or bearish market stance, particularly among smaller and mid-cap stocks. This may reflect profit-booking, sector-specific headwinds, or broader macroeconomic concerns. The balanced signals in large caps indicate that blue-chip stocks are consolidating, with no clear directional bias emerging yet.

The absence of fall-from-peak patterns is noteworthy, as it implies that despite technical weakness, many stocks have not experienced sharp declines from recent highs. This could indicate underlying resilience or a lack of aggressive profit-taking, which may provide a foundation for potential rebounds if market conditions improve.

The bullish signals concentrated in the Computers - Software & Consulting sector align with ongoing strength in technology and IT services, which have benefited from global demand and digital transformation trends. Conversely, bearish signals in Auto Components & Equipments and Pharmaceuticals & Biotechnology may reflect sector-specific challenges such as supply chain disruptions or regulatory pressures.

Forward-Looking Technical Considerations

Investors should closely monitor the continuation or reversal of these technical patterns in the coming week. Key levels to watch include the 200-day moving averages for stocks exhibiting golden or death crosses, as sustained moves above or below these averages often confirm trend direction.

For stocks with golden cross signals, volume confirmation will be critical to validate the strength of the bullish momentum. In particular, technology sector names like Infosys Ltd and L&T Technology Services Ltd may offer opportunities if their technical strength persists.

Conversely, stocks in Auto Components & Equipments and Pharmaceuticals & Biotechnology sectors showing death cross patterns warrant caution, as these may face further downside pressure unless supported by fundamental improvements or sectoral catalysts.

The limited number of gap down openings and absence of fall-from-peak patterns suggest that while bearish sentiment is evident, extreme downside moves have been contained. This may provide a technical floor for some stocks, offering potential entry points for investors seeking to capitalise on oversold conditions.

Overall, the market’s technical landscape this week reflects a cautious environment with selective pockets of strength. Investors should combine these technical insights with fundamental analysis and upcoming earnings or sector-specific events to make informed decisions.

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