Monthly Charts are here!

September 1, 2021

It's that time of the month, guys!

We get to see monthly candlesticks and refocus on the broader trend. We've said time and again how messy the current market is. When we look at the daily chart, we see a mess. When we look at a weekly chart, we see a mess. But when we look at monthly charts, a lot of things become clear.

It's almost as if you're trying to take a picture but the lens is unable to focus on the object. Monthly candlesticks correct just that. They help us focus on the object and present a clear picture of the trend.

We took a peek at some of the charts, and at a broader level, we thought these help understand some trends clearly.

First up is of course Nifty 50. The index has been performing better over the past few weeks and we shared how large caps had taken it upon themselves to take this rally forward.

What we have here is a monthly chart.

One look at this chart and you can tell that there has been a resurgence of strength here. A big bullish candlestick to move past two months of doji candlesticks. What does this mean? The appearance of a strong candlestick (bullish or bearish) after a doji, guides the direction of the market. The appearance of a doji symbolizes indecision and confusion among market participants. While a strong candlestick gives direction.

Well, we seem to have some direction now. If the current trend persists, the next target we're tracking is 19,800.

Click on the chart to zoom in.

Let's take a look at a couple of sectors now.

For a while there we were discussing how Nifty Energy was taking the lead among the sectors after a long time. Post that we saw a correction and the energy in energy died down.

Now we're looking at some signs of recovery as the index managed to gain some lost ground. Will this carry forward to the next month? We're going to have to watch out for that. Until then, we're keeping a close eye on 20,400 as the level to be breached.

The next sector that has demanded our attention is Infrastructure.

As can be seen from the image below, Infra has broken out of a 13-year base. Let's say that again.

Infra has broken out of a 13-year base!!

One can see the impact of this breakout on stubborn names like Bharti Airtel too! The next target that we're looking at is 4,850. And from the looks of it, it might not be a challenge!

Among commodities, Aluminum is back to taking the lead. The strong breakout in July, followed by the move in August is significant in terms of post-breakout moves. We saw the price consolidate near 193 for three months. Right after this came the breakout.

A continuation in this trend could take the price further towards 235.