Technical Signal Overview

During the period from 1 to 31 December 2025, a total of 579 technical pattern signals were recorded across Indian equities. Of these, 161 were bullish signals, including 80 golden cross events and 81 gap ups, while bearish signals dominated with 418 occurrences, comprising 363 death crosses, 52 gap downs, and 3 fall-from-peak patterns. This distribution indicates a prevailing bearish bias in the market’s technical landscape.

Golden cross patterns, where the 50-day moving average crosses above the 200-day moving average, are traditionally viewed as bullish indicators signalling potential upward momentum. Conversely, death crosses, defined by the 50-day moving average crossing below the 200-day moving average, suggest bearish trends and possible price declines. Gap trading patterns, characterised by significant price gaps at market open confirmed by volume, provide additional insights into short-term sentiment shifts. Fall-from-peak signals highlight stocks retreating from recent highs, often signalling profit-booking or correction phases.

Market breadth was notably skewed, with bearish signals outnumbering bullish ones by more than two and a half times. This imbalance suggests caution among investors, with technical indicators pointing towards potential downside pressure in the near term.

Market Capitalisation and Sectoral Patterns

Breaking down signals by market capitalisation reveals a consistent bearish leaning across all segments. Large-cap stocks registered 23 technical signals, with 19 bearish and 4 bullish. Mid-cap stocks showed 33 signals, 25 bearish and 8 bullish. Small-cap stocks were the most active with 305 signals, including 102 bullish and 203 bearish. Micro-cap stocks also leaned bearish with 218 signals, 47 bullish and 171 bearish.

Sector-wise, the Non Banking Financial Company (NBFC) sector was the most active with 37 signals, predominantly bearish (24) but also showing a notable number of bullish signals (13). Auto Components & Equipments matched this activity with 37 signals but tilted more heavily bearish (27 bearish vs 10 bullish). Garments & Apparels and Realty sectors also exhibited bearish dominance, while Computers - Software & Consulting stood out as the only sector with a slight bullish inclination (11 bullish vs 10 bearish signals).

Key Stocks and Technical Pattern Highlights

Among the golden cross signals, large-cap technology companies such as HCL Technologies Ltd and Infosys Ltd featured prominently, reflecting potential technical strength in the software and consulting sector. Mid-cap stocks like Sona BLW Precision Forgings Ltd and Oberoi Realty Ltd also recorded bullish moving average crossovers, suggesting pockets of strength beyond the large-cap space.

Small-cap stocks with golden cross patterns included Automotive Axles Ltd and Avanti Feeds Ltd, indicating selective bullish momentum in auto components and FMCG sectors respectively. Micro-cap stocks such as RBZ Jewellers Ltd and Medico Remedies Ltd also appeared in the bullish crossover list, though these smaller companies generally exhibited more mixed technical signals.

On the bearish side, death cross signals were concentrated in large-cap industrial and consumer sectors, including Pidilite Industries Ltd, UltraTech Cement Ltd, and Hindustan Unilever Ltd. The Auto Components & Equipments sector showed a particularly high concentration of death crosses, reinforcing the sector’s technical weakness this month.

Gap up and gap down patterns further illustrated market sentiment shifts. While 81 gap ups were recorded, signalling bullish openings, 52 gap downs indicated bearish openings. The absence of fall-from-peak signals beyond three stocks suggests limited widespread profit-booking from recent highs, though the overall bearish technical environment tempers optimism.

Understanding the Technical Patterns and Market Implications

The golden cross is a widely followed bullish signal where the short-term 50-day moving average crosses above the long-term 200-day moving average, often interpreted as a shift to upward momentum. Historically, stocks exhibiting golden crosses have shown a higher probability of sustained rallies, especially when accompanied by strong volume.

Conversely, the death cross, where the 50-day moving average crosses below the 200-day moving average, signals potential bearish trends. This pattern has historically preceded periods of price weakness or consolidation, particularly when occurring in sectors under pressure, such as Auto Components & Equipments this month.

Gap trading patterns, involving significant price gaps at market open, provide insights into immediate market sentiment. Gap ups often reflect positive news or buying interest, while gap downs indicate selling pressure or negative developments. The near parity between gap ups (81) and gap downs (52) this month, despite the overall bearish signal dominance, suggests short-term volatility and mixed investor reactions.

Fall-from-peak signals, though limited to three stocks, highlight isolated cases of profit-taking or technical corrections from recent highs. Their scarcity this month indicates that widespread profit-booking has not yet materialised, even as bearish moving average crossovers dominate.

Large-cap stocks showed a more pronounced bearish technical profile compared to small-caps, which, despite a bearish tilt, still registered a substantial number of bullish signals. This divergence may reflect rotation dynamics, with investors cautious on blue chips while selectively accumulating smaller companies with improving technical setups.

Forward-Looking Technical Considerations

Investors should monitor continuation or reversal signals in key sectors. The Auto Components & Equipments sector’s concentration of death crosses warrants caution, as technical weakness may persist unless supported by fundamental improvements or sector-specific catalysts. Conversely, the Computers - Software & Consulting sector’s balanced technical signals, including multiple golden crosses, suggest potential for selective strength.

Upcoming earnings announcements, macroeconomic data releases, and policy developments will be critical catalysts influencing technical patterns next month. Stocks currently exhibiting golden crosses with strong volume confirmation, such as HCL Technologies Ltd and Infosys Ltd, merit close observation for potential sustained rallies.

Technical levels to watch include the 200-day moving average as a key support or resistance marker. Breaks above or below this level, confirmed by volume, will provide further clarity on trend direction. Additionally, gap fill patterns may offer short-term trading opportunities as prices attempt to close previous gaps.

Overall, the predominance of bearish technical signals advises prudence, but pockets of bullish momentum in select sectors and market caps offer opportunities for discerning investors.

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