The previous week was short; the Indian markets traded for four days owing to one trading holiday on account of Ramadan Id. However, while staying largely bearish, the markets weathered the storm inflicted by the US announcing reciprocal tariffs on almost everyone and kicking off a serious trade war. The Indian markets stayed extremely resilient but ended the week on a negative note. The Index moved in the range of 707.70 points over the past four sessions. The volatility also rose; the India VIX surged 8.16% on a weekly basis to 13.76. The Indian benchmark Index closed with a net weekly loss of 614.90 points (-2.61%).

The equity markets across the world are likely to stay under pressure and in a bit of turmoil. However, the Indian markets are likely to remain relatively resilient. We live in an interconnected world; it is not surprising if we see the markets staying under pressure along with the other equity markets. However, what is expected to stand out will be the Indian market’s expected relative outperformance. This was evident over the previous week as while the Nifty and Nifty 500 lost 2.61% and 2.50%, the US key indices SPX, Nasdaq, and the Dow lost 9.08%, 10.02%, and 7.86%, respectively. While India’s VIX spiked just over 8%, the CBOE VIX has spiked 109.14% on a weekly basis. While the Indian markets may also show jitters and stay under pressure, this relative outperformance is likely to persist.

The coming week is again short, with Thursday being a trading holiday for Shri Mahavir Jayanti. The markets are expected to start lower on Monday following global weakness. Over the coming week, we can expect the levels of 23050 and 23300 to act as potential resistance points. Importantly, the supports are expected to come in at 22600 and 22450.

The weekly RSI is at 44.93; it stays neutral and does not show any divergence against the price. The weekly MACD is bearish; however, the sharply narrowing Histogram hints at a likely positive crossover in the future. A strong black-bodied candle showed the sustained downward pressure on the markets.

The pattern analysis of the weekly chart shows that after rebounding off the 100-week MA, the Nifty staged a strong rally that halted at the 50-week MA. This MA is placed at 23849; this was the support that the Index had violated on its way down, and now acts as a resistance. The previous week also saw the Nifty slipping below the 20-week MA positioned at 23412. While the Index stays in a secondary trend, it remains in a large but well-defined trading range that is created between 23400 on the upper side and 22100 on the lower side.

Despite being short, the coming week is expected to see a wider trading range and some more volatility staying ingrained in it. It is strongly recommended that while the valuations look tempting enough to initiate buying, all fresh buying should be done in a staggered manner. One must not go out and buy everything all at once, but one should do it in a staggered way while allowing the prices to stabilize and indicate a potential reversal point. Leveraged positions must be kept at modest levels, and fresh purchases must be kept limited to the places where there is emerging relative strength. A cautious approach is advised for the coming week.

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 the Nifty Bank and Financial Services indices are rolling strongly inside the leading quadrant. Besides these two indices, the Nifty Commodities, Metal, Infrastructure, and Services Sector Indices are also inside the leading quadrant.

The Nifty Pharma Index is the only one inside the weakening quadrant.

The Nifty IT Index has rolled inside the lagging quadrant and is languishing inside that quadrant along with the Nifty Midcap 100 index. The Nifty Realty and the Media Index are also in the lagging quadrant; however, they are improving relative momentum against the broader markets.

The Nifty PSE and Energy Indices are inside the improving quadrant along with the PSU Bank index, which is seen as strongly improving its relative momentum. The FMCG, Auto, and Consumption Indexes are also inside the improving quadrant but are seen rolling towards the lagging quadrant again while giving up on their relative momentum against the broader markets.

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

How low can the S&P and the Nasdaq fall? More importantly, how can an investor navigate this volatile environment?

In this eye-opening video, Mary Ellen McGonagle delves into the stock market’s fall, identifies key support levels, and compares them to past bear markets. She also discusses inverse ETFs and their past price action. Don’t miss out on these key technical points. They will help you identify when the market is getting ready to reverse.

The video was originally published on April 4, 2025. You can watch it on our dedicated page for Mary Ellen’s videos.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

I am attending and speaking at the CMTA West Coast Regional Summit in San Francisco from Friday, 4/4, to Sunday, 4/6, so I don’t have enough time to write a full blog article updating the best five sectors.

So, instead, I have added the graphs and the new ranking to this article for review, and I will update the text and the positions in the portfolio on Monday.

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

American Water Works (AWK)

Why focus on a utility that isn’t reporting earnings this week? It’s because the biggest question of the week is where should you put your money when markets are in turmoil. Hence, we review American Water. 

Do you want safety with a 2% dividend, a little international exposure, and no tariff implications? Then I give you Jersey’s finest, American Water Works Co, Inc. (AWK). 

Technically, the stock is breaking out to new highs and trying to hold on. If this market sell-off is more prolonged, then this is a good place to hide out and is also a nice diversification for your portfolio. It won’t run like a tech stock, but the risk/reward set-up is favorable. 

Use the $146 level to set stops on the downside with upside targets based on the breakout from this rounded bottom formation at roughly $175. The candle formation put in on Friday to close the week was not ideal but may be worth the risk given the volatility.

And if you like lagging indicators, a “golden cross” formed last week and is another technical reason to look positively on the stock.

Delta Air Lines (DAL)

Delta Air Lines (DAL) shares have nosedived 50% from its January peak as it heads into earnings week. Shares fell 16% when the company slashed its first-quarter outlook in early March.

Delta cited declining consumer confidence amid growing uncertainty over the economy, which resulted in weaker domestic demand. It cut its revenue guide to rise between 3% and 4% compared to an outlook of 7–9%.

Technically, the damage has been done. The stock has been oversold since March and is beginning to show a bullish divergence. In this case, price makes a new low but the RSI does not. Look for a break above 30 in the RSI as a buy signal.

The risk/reward is good but not great. DAL has tested and held a support area just above $35 going back to early 2024. A break and close below $35 and downside risk takes the price to $30. 

A sharp V-shaped rally could happen with good earnings results and positive guidance. That’s a big IF, given the continued air of uncertainty. A small rally could see the stock get back to $44. 

Historically the trends in the airline stocks last for months and are rarely neutral. Follow the trend higher if it changes. Otherwise, a landing lower is likely. 

J.P. Morgan Chase

J.P. Morgan Chase (JPM) will be one of the most watched earnings of the quarter. Not only is it one of the largest weighted financial stocks in the world, but its CEO, Jamie Dimon, isn’t one to mince words. 

Shares have fallen 25% from its February 9 peak as the market has corrected in the face of tariff uncertainty and a global trade war. Dimon has been somewhat quiet but is always one to give a great sound bite or two, come the conference call. 

Technically, we have a problem

Shares have broken a 16-month uptrend. The stock price breached its 50-day moving average in March, then failed to recapture it—old support became resistance. After one successful test of its rising 200-day moving average, the stock broke through it last week with some vigor. 

On a rally, look for that 200-day moving average at $228 to become resistance. The sellers are now in charge until something changes. To the downside, we have a target of $180 based on a head and shoulders topping pattern as outlined above. 

The stock market hoped for curtailment of tariffs on Wednesday, but that didn’t happen. Even the better-than-expected March non-farm payrolls weren’t enough to turn things around.

The stock market slid sharply with the S&P 500 ($SPX), Nasdaq Composite, and Dow breaking through key technical support levels and closing very close to the low of the day’s range.

The StockCharts MarketCarpets was a sea of deep red with a few small green islands. All S&P sectors were trading lower on Friday. 

The selloff was across the board and precious metals, which soared in the early part of the week, got slammed after the tariff announcement. When investors sell off equities and precious metals, it’s a sign of elevated fear, which is reflected in the spike in the Cboe Volatility Index ($VIX). It closed at 45.12, close to its high of 45.56.

Not a Pretty Picture

The adage, “The stock market takes the stairs up and the elevator down,” rings true. Unfortunately, things got ugly quickly. It’s a volatile environment, and if your portfolio includes mostly equities, you’re probably beside yourself. But it’s not time to let your emotions get the better of you. Neither is it the time to engage in dip buying. If you look at any chart of the market, it’s clear which direction the market is heading. 

The three-year weekly chart of the S&P 500 ($SPX) below shows the index has dropped below its August lows. 

FIGURE 1. THREE-YEAR WEEKLY CHART OF THE S&P 500 INDEX. It was a rough week in the stock market with the S&P 500 closing below its 100-week simple moving average. Chart source: StockCharts.com. For educational purposes.

In March, the S&P 500 crossed below its 40-week simple moving average (SMA), the equivalent of the 200-day SMA. Wednesday’s tariff announcements sent the index even lower, breaching its 100-week SMA, approximately a two-year average. Another concerning point is that Friday’s close is below the August 2024 low. This increases the probability of the index dropping further, perhaps as low as its 150-week SMA. But then again, you never know what the market is going to do. 

A smart investor is always engaged with the market in good times and bad. It’s important to observe the price action at key support levels to get an insight into when buyers come back into the market. 

Looking at Market Breadth 

The Bullish Percent Index (BPI), a breadth indicator that gives a bird’s eye view of the internals of different indexes and sector ETFs, isn’t encouraging, at the moment. The only sectors or indexes at or above 50, as of this writing, are the S&P Consumer Staples Sector BPI ($BPSTAP) and the S&P Utilities Sector BPI ($BPUTIL). Despite the slightly bullish values, the corresponding ETFs are trading below their 50-day SMA. 

The chart below displays $BPUTIL with the chart of the Utilities Select Sector SPDR Fund (XLU). Even though the BPI of the Utilities sector is above 50, it’s still trending lower and XLU just crossed below its 50-day SMA.

FIGURE 2. THE UTILITIES SECTOR IS ONE SECTOR WITH A BPI OVER 50. While a BPI over 50 indicates bulls are in favor, the chart of XLU has fallen below its 50-day SMA. Generally, breadth is leaning towards bearishness. Chart source: StockCharts.com. For educational purposes.

Sellers are in control across the board. The key will be to identify when buyers are in favor. And for that, you need to monitor the BPI and other breadth indicators.  

Investor sentiment got overly bearish quickly. When this occurs, investors usually look for signs of capitulation. We’re not seeing those signs yet, but it’s worth adding sentiment indicators to your toolkit. 

Sentiment Check

At some point, the selling will stop and buyers will come back in. The worst action to take now is to enter positions when you think the market has hit its low, only to catch a falling knife.

When markets are at extreme levels of fear or greed, sentiment indicators such as the VIX can be helpful. Besides the VIX, the American Association of Individual Investors (AAII) Sentiment Survey helps identify when investors are extremely optimistic or pessimistic. Generally, when emotions reach extreme levels, it may be an alert to move in the opposite direction of the crowds.

The five-year weekly chart below displays the S&P 500 with the AAII bullish minus bearish sentiment in the lower panel.

FIGURE 3. S&P 500 AND BULLISH VS. BEARISH SENTIMENT. Bearish sentiment is relatively high and the S&P 500 could fall if the bearish sentiment persists. Chart source: StockCharts.com. For educational purposes.

The lower panel shows that investor sentiment is negative, similar to between April 2022 and September 2022. Note how the market went through a correction before resuming its uptrend. 

The price action in the S&P 500 coincides with extreme bearish sentiment and could remain this way for an extended period. How will you know if sentiment has reached extreme levels? It can be challenging but constant monitoring of market breadth and sentiment indicators can reveal a shift in behavior. When buyers come back in, the indexes break above resistance levels, and momentum indicators turn bullish, there’s a chance the bullish trend will resume. 

The Bottom Line  

Investors should stay on the sidelines until the unwinding of positions is in the rearview mirror. As painful as it may be to watch your portfolio lose value, at some point the selling will stop and buyers will get back in. Look for signs of this occurring before adding any positions to your portfolio. Congratulations to investors who followed the traditional 60% stocks, and 40% bonds portfolio mix. Rising bond prices provide some cushion to falling equity prices. 

End-of-Week Wrap-Up

• S&P 500 down 9.08% on the week, at 5074.08, Dow Jones Industrial Average down 7.86% on the week at 38314.86; Nasdaq Composite down 10.02% on the week at 15,587.79.
• $VIX up 109.28% on the week, closing at 45.31.
• Best performing sector for the week: Consumer Staples
• Worst performing sector for the week: Energy
• Top 5 Large Cap SCTR stocks: Corcept Therapeutics, Inc. (CORT); Elbit Systems, Ltd. (ESLT); MicroStrategy, Inc. (MSTR); Palantir Technologies, Inc. (PLTR); XPeng, Inc. (XPEV)

On the Radar Next Week

• Earnings season kicks off with Delta Air Lines, Inc. (DAL), J.P. Morgan Chase (JPM), Wells Fargo (WFC), and others reporting
• March CPI
• March PPI
• FOMC minutes
• Several Fed speeches

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.

In this exclusive StockCharts video, Joe Rabil shows you how to use the ADX on monthly and weekly charts to find stocks with massive breakout potential. Joe walks you through several examples of stocks and ETFs that broke out of an extended period of trading sideways. He also discusses the recent stock market correction and where the SPY and QQQ are trading with respect to the support of moving averages.

This video was originally published on April 2, 2025. Click this link to watch on Joe’s dedicated page.

With the S&P 500 and Nasdaq dropping quickly after this week’s tariff announcements, investors are scrambling to identify areas of the market demonstrating strength despite broad market weakness.  The good news is that I was able to easily find strong charts with improving relative strength using the StockCharts platform.

As much as it feels like “everything is down” after Wednesday’s news on increased tariffs on a vast number of products, a quick review of the S&P 500 MarketCarpet on Thursday afternoon provides a quick reminder that plenty of stocks were actually trading higher into the afternoon.

Let’s review two stocks and one ETF demonstrating strength in recent weeks.  And if you’re looking for more potential ideas, perhaps review my Top Ten Charts to Watch for April 2025 with Grayson Roze!

Kroger Co. (KR)

When the economy is strong, and consumer confidence is high, we often see a surge in “things you want” such as travel and luxury goods.  During periods of economic weakness, those Consumer Discretionary names will struggle relative to “things you need” like cleaning products, household goods, and beverages.  So it’s not surprising that our first two charts are in the Consumer Staples sector!

Indeed, the chart of Kroger has a “long and strong” look to it, featuring a consistent pattern of higher highs and higher lows since the October 2024 breakout.  

Two pullbacks in March saw Kroger achieve a higher low above the 50-day moving average, confirming that buyers are coming into “buy the dips” and push the stock to new highs.  The most impressive feature of this chart is the steady uptrend in the relative strength.  As long as that series remains trending higher, it means Kroger provides an opportunity to do better than our struggling benchmarks.

Keurig Dr Pepper Inc (KDP)

Back in October 2024, Keurig Dr Pepper saw a series of downside gaps on disappointing earnings results.  I’ve highlighted these gaps with shaded areas so we can see how often these price ranges have come into play during subsequent price action.

We can see that KDP struggled to regain the lower price gap range late last year, with the 200-day moving average also serving as resistance during that period.  Then in February we finally saw a break above the 200-day before KDP eventually found resistance at the upper price gap from last October.  From late February through early April, Keurig Dr Pepper has basically traded between these two price zones, with the most recent upswing taking the stock back up to test the upper price gap range.

Similar to Kroger, I would say the most compelling piece of this chart is the improving relative strength.  If most stocks are in primary uptrends, then perhaps KDP does not look nearly as impressive.  But with Magnificent 7 stocks and other growth names pounding out clear distribution phases, the chart of Keurig Dr Pepper could provide an opportunity to outperform.

Utilities Select Sector SPDR Fund (XLU)

Now let’s consider utilities, a sector which is usually bucketed with other defensive groups yet has actually traded along with growth sectors at times over the last 12 months.  The reason for this shift has been partly due to the incredible energy needs of artificial intelligence, cryptocurrency mining, and other enterprises requiring heavy computer power.

The price structure of the XLU is fairly neutral at the moment, with this ETF basically stuck in a trading range since the 4th quarter of 2024.  But with most S&P 500 names trading below their 200-day moving averages, I’m immediately drawn to charts that remain above this long-term trend barometer.  The XLU has actually successfully tested the 200-day moving average three times in 2025, all resulting in short-term rallies.

The question here is whether the XLU can gain enough momentum to push above a clear resistance level around $82.  But even that does not actually come to pass, a chart remaining in a sideways trend could provide an easy way to ride out a period where the major benchmarks are losing value.  And given the higher-than-average dividend yield along with decent price action, the utilities sector seems like it deserves a second look.

Both KR and KDP were featured in our Top Ten Charts to Watch for April 2025, which you can access below!

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

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.

Stocks are in a freefall with selling pressure spreading into industrial metals and other economically sensitive commodities. There are few places to hide in bear markets, and the list of alternatives continues to shrink. Bitcoin, an alternative, is holding up relatively well since March, but this crypto is positively correlated with stocks long-term and has yet to achieve a relative breakout. Today’s report focuses on Bitcoin’s correlation and relative performance. 

TrendInvestorPro takes a weight of the evidence approach to define bull and bear markets. This evidence turned bearish on March 13th and remains bearish until proven otherwise. As noted in s to all our reports and videos.

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