[Premium] Three Charts For The Week Ahead

JC Parets
November 8, 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 the Dow Twins, the AUD/JPY currency pair, & Bank Nifty.

Let's move into this week's topics.

1. The first chart we’re looking at is that of US Mid-caps and Small-caps: MDY and IWM. With the week gone by we got a breakout confirmation in Mid-caps and Small-caps that has been in the making for quite some time now. Mid-Caps (MDY) moved past their resistance and are well on their way to the target of 550.

The Small-cap index (IWM) comprising of 2000 stocks has been moving sideways for months now! After nine months of a sideways move, we finally have a breakout!

A breakout in these indices is crucial because this sets the tone for a market-wide move. A continuation of this trend bodes well for the bull market we're in. A consistent consolidation just leads to a more 'wait and watch' scenario. Looks like we're past that now!

2. The second chart is of two big European indices- Germany and France. Both these indices have clocked new all-time highs in the week gone by.

What's more important is that at the current juncture, these major indices are making new highs, adding to the strength in the market.

While Germany has been stronger and moved past its resistances early on itself, France has broken out of a 21-year base! Let's read that again, 21-year base!! With this France has now started to move higher.

These moves are crucial to track from a global market perspective and help us in tracking the strength and momentum of the market rally.

3. The third chart we’re tracking is Nifty Realty. The index looks like it's gaining its strength back after consolidating above the breakout point of 520.

A confirmed move above 520 can take the index further towards the level of 600, putting Realty in the list of strong sectors.

On a relative basis too, we can see Realty trading close to its 2018 highs. Momentum is in support of this move and we'd like to see this ratio move above the 2018 highs for the bull trend in the Realty relative strength chart to finally come forward!

In our view, these charts will help set the tone for this week and provide us with 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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