[Premium] Three Charts For The Week Ahead
Let's move into this week's topics.
1. We're watching Copper and Base Metals this week because they're extended in the near-term and showing possible signs of consolidation. A pause in these "cyclical" assets would likely affect a lot of the cyclical sectors that have been pushing stocks higher and risk assets in general.
Click on chart to enlarge view.
2. The largest component of the Nifty Bank Index, which is one we've been paying attention to, is attempting a breakout again. A successful move above 1,100 would signal potential rotation into the Financial Services/Banking stocks which would be a positive for Equities.
The weak performance of Banks on an absolute and relative has been a data point in favor of the bears for a while, so a successful breakout here would be a big development.
3. Taiwan has been a global market leader for a while, particularly due to its large exposure to Semiconductor stocks, which have benefited from the massive rally in the Technology sector of markets around the world.
Recently it broke out to new all-time highs, but momentum diverged negatively and prices pulled back to their breakout level last week. Is this a simple retest before further upside? or will this turn into a failed breakout that signals tougher times ahead for risk assets? Our level is 12,200, so we're watching that very closely.
In our view, these charts will help set the tone for this week and provide us information on how we should approach the market in the coming weeks.
Make sure to check out our "Trade of The Week", which is a long in the Consumer Goods' space.
Thanks for reading and please let us know if you have any questions.
Allstarcharts Team