[Premium] Three Charts For The Week Ahead

JC Parets
August 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 50, JP Morgan Corporate Bond and Nifty Small Cap 100, & Percentage of Small cap stocks above 50-DMA.

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

1. The first chart we're looking at is S&P 500. The price is back at the scene of the crime. We mentioned time and again how important the 4,100 level was to the market trend. The price has since breached that zone and climbed back towards it.

How the price reacts to this level again is what we're waiting to watch. If we see a successful move above 4,100, then there is a bullish case to be made for the market. In the event that the resistance holds its ground, then we will have to be ready for another leg of the rally moving lower.

Click on the chart to zoom in.

2. The second chart we're looking at is the Financial sectors of India, the US, and Europe. We mentioned earlier how Bank Nifty has acted as a leading indicator of market corrections and reversals. Going by the current move, Bank Nifty has certainly recovered before its international variants. If history is anything to go by, then the downward sloping trendline breakout that we've seen in Bank Nifty should reflect in XLF as well as E1FIN.

No bull market runs without the Financials participating, always remember that! So if we're looking at a revival in the market sentiment, we definitely need the Financials across the globe to participate!

3. The third chart we're looking at is Nifty Consumption. Following the new all-time highs, we saw in the FMCG sector, the Consumption sector is now marking the same trend. The consumption sector made a new all-time high this week as the price moved past the resistance zone of 7,640.

While several stocks overlap between Consumption and FMCG, what's important to note is market participation and the number of new highs. If these numbers are going, then we know that the market is recovering with broader participation.

The next target to track in this case would be 10,120.

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