[Premium] Three Charts For The Week Ahead

JC Parets
January 9, 2022

We retired our "Five Bull Market Barometers" in 2020 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 Nifty 500, Nifty IT, & Nifty Pharma.

Let's move into this week's topics.

1.  The first chart we're looking at is KRE. This is an index of the Regional Banks. As can be seen from the price action below, we now have a new all-time high as of last week's close. We've been discussing the rising interest rates and the impact they could have on sectors and asset classes.

In an environment where the interest rates are rising, the banks are certainly expected to fare well. We can see that play out in the price action as well. If regional banks are doing well, there is no reason for the broader stock market to not do well. For quite some time our crucial support to track was 2018 high. So as far as the price traded above that, we weren't so worried about the bull market scenario. Seems like the new highs in several sectors are indicating an ongoing positive trend. What we'd like to see would be a follow-through in the indicator s well. That's something we'd like to keep an eye on.

2. The second chart we're looking at is that of Lumber. The price is currently making seven-month highs, post the monster rally, and dramatic selloff. With the price recovering to levels last seen in June 2021, can we see a continuation in the current rally?

Lumber acted as a leader among the commodities in early 2021. We're interested in tracking this commodity if any of those relationships will play out and if commodities will catch a bid again.

Is this just another erratic, or is this here to stay? We'll have to wait and watch. But the important support to track right now would be 1,200.

3. The third chart we're looking at is Crude Oil in Rupees. Crude Oil has been struggling to move past its resistance near 5,930 and had rolled over almost instantly from those levels. What we're seeing at the moment is a recovery in crude oil ( in both Dollar and Rupee denominations).

As long as the price trades above 5,670, the next target to track would be 5,930.

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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