[Premium] Three Charts For The Week Ahead

JC Parets
May 22, 2021

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

Last week we focused on Nikkei 225, Nifty FMCG & Nifty PSU Banks.

Let's move into this week's topics.

1.  The first chart we're looking at is Euro Stoxx 50. When this index broke out of its multi-year base almost a month back, we took it as a sign of great market participation. After 12 years, the price seemed to have absorbed the overhead supply, ready to blast away into a strong rally. We're now looking at a minor pull-back in the index.

The reason this becomes important to track is that when such big base breakouts don't follow through, the move in the opposite direction tends to be nasty. From failed breakouts come fast moves in the opposite direction. We'd like to keep this on our radar to gauge the global market participation going forward.

3,825 is the crucial level we're tracking.

Click on chart to enlarge view.

2. The second chart we're looking at is Nifty 500. The index marked a new all-time high in the week gone by. With the price resolving its sideways move in the direction of the underlying trend, is this a sign for other indices to follow? Well, we'll have to see about that. The new high is definitely a positive in this index.

For quite some time the price was indecisive around our risk management level of 12,260 and we continued to observe the move around this level. For now, it seems as though the ensuing move will be on the upside.

3. The third chart we're looking at is Nifty Realty. The index has halted at an important level of support with price history. The price has bounced back from the level of 300, which could be an interesting development to track. Since moving towards 370 and rolling over, Realty has been correcting non-stop.

If this move follows through, we might see a recovery in the stocks of this segment as well.

The level we're watching is 300, which is also the risk management level. The target from current levels is 370.

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.

Also, make sure to check out our other weekly post, "Trade Of The Week."

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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