[Premium] Three Charts For The Week Ahead

JC Parets
September 13, 2021

We retired our "Five Bull Market Barometers" in mid-July last year 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 CRB Index, Nifty Energy along with Reliance Industries and Nifty Bank/ Nifty 50.

Let's move into this week's topics.

1. The first chart we're looking at is that of the Shanghai Composite Index. For the longest time, the price has been consolidating sideways. This sideways move has also put a damper on the overall Emerging market space. In the week gone by, we saw a hint of recovery in the price action. This halted right at its overhead supply zone of 3,700.

We're keenly observing this chart to see if we get that big base breakout here, which we've been seeing in other emerging markets. 3,700 is the line in the sand. Gotta look out for this one!

Click on chart to enlarge view.

2. The second chart we're tracking is the MCX iCOMDEX Base Metal Index. We can see the line chart soaring higher as base metals glittered last week. We saw some good moves and follow-throughs in terms of breakouts. Base metals are certainly stepping up and showing their strength in current market conditions. What also helps their case is the lack of movement in the US Dollar.

The sky is clear for the base metals. Will they continue to fly? Let's see...

3. The third chart we're looking at is the ratio chart of Nifty 50 vs Gold. Gold has been the worst place to be in. Across the board. And that continues to play out as we can see in the chart below.

Nifty 50 is rapidly climbing higher relative to Gold, moving past resistances and outperforming the yellow metal. We're fast approaching the 2019 highs which was the point where the large-cap index was displaying diminishing relative strength over longer-term charts. This was the point where Gold had overtaken Nifty50 in terms of performance and strength. A move above these historically important levels would be crucial.

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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