Monthly Charts Are Here Again

JC Parets
November 2, 2021

Monthly Charts are very important to us. As a team, we regroup several times, but monthly charts put us on the same page, without having to discuss it.

Process is an important aspect of any activity. And so, Monthly Charts analysis is an important aspect of our research. Without this, it is easy to get swayed in the short-term moves and get carried away by them.

You can sign up for our Monthly Strategy Call and get the whole update of the market. We're here to provide a glimpse of what's going on.

The market goes through different phases in any given trend. Sector rotation is at play so often that it is imperative to identify which ones are outperforming the others, in order to gain the most.

First up, let's take a look at a sector that has displayed the most strength and has made a turnaround last quarter.

The PSU Banks have been at the front and center of the market move as the banks continue to gain strength.

While we were happy to see a weekly breakout in this index, we now have a monthly breakout too!

The price has moved past a crucial level of 2,730 which has acted as a strong level of resistance in the past. With this, the price has broken out of a three-year base! Financials have struggled because of the lack of participation from PSU Banks and this is exactly what will add to the existing rally.

We are bullish above the level of 2,730 with a target near 3,745.

For the longest time Bank Nifty has been trailing Nifty and has refrained from participating in the market rally. But Bank Nifty is now on its way to the next target. With the price now marking a new all-time high, the index has taken the lead. The next target to track would be 45,880.

Up next, we have a move coming through in the Auto sector.

This breakout on a monthly chart, however, is not the be-all-end-all sign. As you can see, the price must move beyond its 2018 highs, in order to breakout. What is positive here is that the price has consolidated for quite some time and then broken out. The supply at this level may have been absorbed. But as far as the Auto sector is concerned, we'd like to observe it for longer to confirm any trend.

Let's look at some commodities now.

Crude oil. How could we have a discussion about commodities on the monthly chart and NOT talk about Crude Oil? We have a breakout on the monthly chart, folks!

Oil has finally moved past its resistance at 5,460, presenting to us a massive seven-year base breakout! With this move in place, the next target to track would be 7,730. This is a substantial move coming from the 'liquid gold' and it will be interesting to see how it reacts going forward.

Cotton has been the absolute star performer! We've been tracking it for a while now and the strength just refuses to decline. That's a monthly chart by the way. Look at that strong bullish move! Since its base breakout, Cotton has been on an absolute tear!

The next target we're tracking is 38,860, with a risk management level of 29,670.

A new name joining the list here is Jeera. We're seeing signs of strength come through here, but of course need a confirmation before we dig in deeper.

The crucial level for us would be 15,000. A sustained move above that could take the price back to levels last seen in 2019.

These were a handful of charts that have displayed signals that we wouldn't want to ignore.

There are many more charts that we will discuss in our November Monthly Strategy call. Premium members can sign up here.

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

Allstarcharts Team

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