[Premium] Three Charts For The Week Ahead

JC Parets
April 26, 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 ASC Fertilizers and Agro Chemicals Index, Nifty Energy relative to Nifty 100 & Natural Gas.

Let's move into this week's topics. We have big important breakouts to track this week.

1.  The first chart we're looking at is Nifty 500. The market trend currently is messy, to say the least. In this environment, there are a select few stocks that outperform the market as the rest struggle to find their way. The same sentiment is visible from the top-down. Indices have been trading sideways and are now at crucial support zones. Nifty 500 as we can see is trading close to its support of 14,650.

A breach of this level and the index can go tumbling down towards 12,660. This is one chart that we're keeping a close eye on.

2. The second chart we're looking at is Nifty IT relative to Nifty 100.

Notice how the relative chart has broken the 161.8% Fibonacci support level and is progressing lower. We've been discussing how IT has been struggling to hold on to higher levels as sector rotation plays its part in this market cycle. For the first time in a long time, no long IT trades were shared in the monthly conference call as well.

IT definitely seems to be struggling, and if this breakdown continues to follow through, this may just be the beginning.

3. The third chart we're looking at is Nifty Auto. The Auto sector has been displaying some resilience in this messy market environment. But just as with everything else, even within the sector, there are only a select few ideas that are worth looking into at this point.

Our biggest takeaway is that the market has now become extremely specific. The larger move is sideways and within that, there are certain outperformers that must be identified.

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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