[Premium] Three Charts For The Week Ahead

JC Parets
February 8, 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 S&P 500, Nifty 50 / Government Bonds, & Nifty Energy.

Let's move into this week's topics.

1.  The first chart we're looking at is Nifty Private Bank vs. Nifty PSU Bank. The ratio made a new 52-week low. It shows the dominance of PSU Banks over the Private ones.

Private Banks have a long history of being the strong segment against the PSU Banks. This trend changed in November 2020, and we've continued to observe an outperformance in the PSU Bank on an absolute as well as a relative basis.

The chart below is currently hinting at a continued outperformance on behalf of the PSUs and this hasn't happened in a long time. It may be time for the PSUs to finally step up their game!

2. The second chart we're looking at is the BSE Consumer Discretionary vs. BSE Consumer Staples ratio. Discretionary.

Strength in Discretionary shows risk-appetite for more aggressive areas of the market, whereas when the ratio goes down, it indicates demand for low beta often, higher dividend Consumer Staple stocks.

Currently, the ratio has been struggling close to its 2018 highs for over three months. Risk across the market peaked out in 2018. So, it's crucial to watch how this ratio will behave around this level. It'll be a red flag if it continues to move below the 2018 highs. This is definitely one to keep an eye on.

3. The third chart we're looking at is of Crude Oil in Rupees. We're seeing a strong primary trend with higher highs and higher lows as it prints a fresh seven-year high. This translates into a seven-year breakout, folks!

Crude Oil has moved past its resistance near 5,930, the next target to track would be 7,550. Going by the strength of the trend, it seems like price will knock on the door of its next target pretty soon!

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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