The Market Mood in 2025
In a year of election worries and global crosswinds, India’s stock market showed momentum in unexpected places. Blue chips did their steady dance, but the real scene-stealers were stocks that rose week after week—names that found a rhythm, broke past resistance, and refused to look back. Profits, sector tailwinds, and traders who know how to move fast when a trend opens the door drove conviction, not simply enthusiasm.
2025 was a lesson in early strength recognition and riding it out, whether you’re chart-obsessed or momentum-curious. With stabilising macro conditions and altering industry narratives—from cars to infrastructure to tech—this year, disciplined trend-following felt more like tracking a well-lit runway than speculation.
Momentum, in Plain English
Momentum investing thrives on a simple premise: stocks that are going up tend to keep going up, at least for a stretch. It’s the market’s version of kinetic energy—price moves fueled by strong demand, amplified when fundamentals validate the optimism. Think of it as catching a train already in motion: the trick is jumping aboard without waiting too long, and stepping off before the pace slows.
A proper momentum setup isn’t just hype or headline buzz. It blends price action with confirmation—revenue surprises, margin improvements, sector leadership, and those unmistakable surges in volume. When all those elements line up, the market often grants a window where trends are more likely to extend than snap.
The Tells: Indicators Pros Watch
Finding momentum is part science, part art. These signals have been the go-to toolkit for spotting strength before it becomes front-page news:
- RSI sitting north of 60–70: A sustained RSI in this range often hints the trend has juice and isn’t merely a short-lived pop.
- Price above key moving averages: Consistent closes above the 50-day and 200-day moving averages suggest a stock is leading, not lagging.
- Volume confirmation: Rising prices are more believable when they ride accompanied by sharp volume upticks.
- Earnings outperformance: Quarterly beats and positive surprises can ignite multi-week runs, especially when guidance doesn’t disappoint.
- Sector momentum: Being in the slipstream of high-growth themes—EVs, renewables, defense, infrastructure—adds tailwind to a breakout.
Treat these as alignment points rather than absolutes. Momentum is about stacking probabilities, not guaranteeing outcomes.
Sector Tailwinds and Story-Fuel
Narratives matter. A stock pushing higher isn’t just numbers on a screen—it’s a story investors buy into. In 2025, several narratives converged: reaccelerating IT services, capex-heavy infrastructure pipelines, auto demand buoyed by new launches and mix upgrades, and diversified conglomerates flexing across energy, telecom, and retail. These threads didn’t merely decorate the chart; they stitched resilience into price.
When a sector leads, individual names can pull away faster, supported by peer strength and fund flows chasing exposure. Spotting the theme early—then zeroing in on the leaders with clean technicals and supportive fundamentals—has been where many traders made their year.
Case Studies: Momentum Names That Ran in 2025
Momentum isn’t abstract when you can point to tickers that turned the idea into returns. A few Indian stocks pushed ahead of the pack and stayed there, surprising even the seasoned pros with how steadily they sprinted.
Infosys (INFY) Mid-2025 delivered a twist: Infosys posted stronger-than-expected performance with solid sequential revenue growth in Q1 FY26. On the ground, improved pricing discipline and resource efficiency helped it outpace larger rivals, tilting the balance back in its favor. That operational clarity translated into price strength—clean breakouts, sturdy closes above moving averages, and sustained RSI readings that reinforced the trend. For momentum traders, this was a textbook example: fundamentals validating technicals, and a leader reasserting itself in a cautious global IT backdrop.
Reliance Industries (RELIANCE) Diversified scale was highlighted by Reliance. After consolidating, the stock changed gears in 2025 with steady quarterly performance that boosted confidence across its vast operations. A surge that outpaced the Nifty50 and contributed $40 billion to market capitalisation showed purchasers were committed beyond a short squeeze or speculative froth. Tracking volume behind those breaks showed institutions leaning in and the trend riding its own momentum wave.
Larsen & Toubro (L&T) Infrastructure names can be slow burners—until they aren’t. L&T printed a strong earnings beat to open FY26, triggering a sharp 4.5% intraday jump that didn’t fade by the closing bell. More important than the pop was the pipeline: robust order inflows and a hefty ₹6.13 trillion backlog that gave traders a forward-looking anchor. Analysts projected further upside in the mid-teens, and the price action obliged, carving out higher highs with pullbacks that respected support zones. This was momentum in steel and concrete, powered by visibility and execution.
Mahindra & Mahindra (M&M) Momentum loves a blend of product strength and category leadership. M&M delivered, reporting a 32% year-on-year jump in Q1 FY26 profit to ₹3,450 crore, fueled by muscular SUV demand and a record tractor market share. Revenue rose 26% to ₹34,143 crore, a compelling mix for traders scanning for earnings-backed breakouts. The chart reflected the story: sturdy closes above the 50-day average, volume confirming buyers were serious, and RSI readings that showed the move wasn’t running on fumes.
Reading Momentum Without Getting Burned
The heart of momentum is timing. Entries tend to work best after clean breakouts from consolidations, not in the middle of a spike. Likewise, exits often happen when volume fades and price closes slip below well-watched moving averages. It’s not about prediction; it’s about decision-making with guardrails.
Risk management is practical, not poetic: define what invalidates your thesis, keep position sizes honest, and remember that strong trends can still whipsaw. Momentum rewards decisiveness, but it punishes complacency.
How The Pros Frame It
The fastest way to miss a trend is to overthink it. Pros often keep a weekly watchlist of setups that check the technical boxes, then layer in fresh earnings commentary and sector data. When a stock hits the trigger—breakout above resistance, volume smiling, RSI supportive—they act. If the move fails, they move on. If the trend confirms, they let it breathe, adding on constructive pullbacks rather than chasing exhausted candles.
Momentum doesn’t require predicting macro outcomes. It asks you to see what’s strong, measure it, and respect the tape.
FAQ
What makes a stock a “momentum” stock?
Momentum stocks show persistent price strength supported by volume and often by earnings or sector tailwinds, outpacing the broader market over weeks or months.
Is a high RSI always good for momentum?
A higher RSI (above 60–70) signals strong momentum, but it works best when paired with volume confirmation and supportive trend structure.
Why do moving averages matter in momentum trading?
When price stays above the 50-day and 200-day moving averages, it indicates trend health and helps traders spot continuation rather than mean reversion.
How important are earnings beats for momentum?
Earnings beats and positive guidance often catalyze fresh demand, providing the fuel for multi-week breakouts and higher highs.
Can momentum work across all sectors?
Yes, but trends typically run longer in sectors enjoying tailwinds like autos, infrastructure, renewables, or tech services.
Do momentum traders hold for the long term?
They usually hold as long as the trend stays intact, exiting when signals weaken rather than on a fixed timeline.
How do I avoid buying at the top?
Look for breakouts from consolidations with volume confirmation, and avoid chasing extended candles without supportive pullbacks.
Are pullbacks bad in momentum trends?
Constructive pullbacks can be healthy, often offering add-on opportunities if support levels hold and volume remains supportive.
What role does market sentiment play?
Sentiment can amplify momentum, but durability depends on fundamentals and technical structure aligning over time.
Is momentum investing risky?
All investing carries risk; momentum reduces guesswork by following strength, but it requires disciplined entries, exits, and position sizing.
