Global Markets talking the same language - What lies ahead? - Financial Market analysis for the week ended May 16, 2025

If you look at the weekly charts of leading indices from across the world - US, Europe, Asia including China - what strikes you is that they all seem to speak the same language in the past 6 weeks - all have been above to recover fully from the losses since the reciprocal tariffs were announced on Apr 2. In doing so, many of them have given strong pattern breakouts. Consider this.

👉 DJIA has not only recouped lost ground, it has actually managed to close above strong resistance @ 41900 last week. Similarly for Nasdaq and S&P, both of which appear stronger than DJIA, less than 4% away from their ATH. Weekly charts below.

Weekly chart of DJIA illustrating a breakout above a 1-2-3 pattern and close above strong resistance

Weekly chart of Nasdaq illustrating a breakout above a 1-2-3 pattern and close above strong resistance

👉 Similar story across Europe with major indices just less than 5% away from their ATH, with DAX already at an ATH.

👉 Asian markets are relatively weaker with their ATH still far away with the exception of Australia. However, they all appear bullish.

👉 Indian markets are behaving in tandem. Nifty has closed above the key resistance level @ 22800. Banknifty, which after a stunning breakout to ATH had retraced back into the range the previous week, gave a second breakout last week. It looks particularly bullish as it has formed a sell failure on the weekly chart. The broader market also looks good with the CNX Midcap closing above a key neckline resistance. Weekly charts below.

Weekly chart of Nifty illustrating a strong close above key resistance

Weekly chart of Banknifty illustrating a second breakout above key resistance

Weekly chart of CNX Midcap illustrating a strong close above key resistance

So what's next? What appears to be happening across the global markets seems to be a structural realignment rather than just a temporary relief from a 90 day pause. The markets have infinite wisdom, as they say, so for now we can sit back and see the markets perform their bullish act. Technically speaking, many of the leading indices mentioned above should reach their ATH, Indian markets included, in the next few weeks. Time will tell.

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