[Premium] Three Charts For The Week Ahead

Last week we focused on Nifty 50 relative to Indian Bonds, Nifty Auto & Nifty Media.

Let's move into this week's topics.

1.  The first chart we're looking at is Nifty Small Cap 100. We finally have a breakout, folks! The index breached its 2018 highs in the week gone by. It helps to remember that ALL risk-on metrics peaked in early 2018, which is also when the Small caps rolled over. A move beyond the very same level bodes well for this space and the equity market as a whole.

With this breakout, we're interested in observing if these levels hold. If they do, then the next target to track would be 13,630. In case Small caps roll over, then that changes things.

At present, 92% of the index constituents are trading above their 200-DMA. That's definitely a plus, considering that this was the number we were at in early 2021 when the market rally was strong. A continuation of this trend is certainly a big positive! Let's wait and watch!

Click on chart to enlarge view.

2. The second chart we're looking at is S&P 500 along with breadth analysis. This past week, the index clocked a new all-time high. Well, that's good, right? Gotta dig a little deeper for that.

Notice the top most panel representing the percentage of stocks making new 21 day lows. In an ideal scenario, you'd want to see an expansion in the percentage of new 21-day highs. But what we got is an expansion in the lows.

An index making new highs along with more stocks moving lower is not a great sign. So this is definitely something to keep an eye on. Can this breadth improve? Certainly! But can it get worse? That is definitely possible as well. We're following this trend to get some more insights.

3. The third chart we're looking at is the CRB index. So what do we have here? A breakout! The CRB Index has moved past a crucial overhead resistance. It seems like it has reversed a 12-year long bear market. Of course, we'd want to see the index sustain at higher levels, but that's basically what we have here. A breakout in this index is certainly a positive for commodities.

Think of it this way - if base metals or precious metals were really that negative, we'd certainly see the resistance hold its ground. At least we wouldn't be discussing a breakout.

We're tracking this space to see if this breakout is worth buying into. More on this soon!

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