[Premium] Three Charts For The Week Ahead

JC Parets
November 2, 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 vs. Gold, & Nifty PSU Bank.

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 the All-Country World Index. The month of October was significant in that most indices found their ground with strong bullish candlesticks appearing at crucial support zones. ACWI was no different. We've been alluding to the importance of the 2018 highs and pointed out that if price dip below these levels, the market move could get tricky. What we have now, is a bounce-back coming through in ACWI. The price has moved back above the 2018 highs and seems to be holding up well. So what are we watching out for?

The price has to sustain above these levels. It is not uncommon for the price to hover around a crucial zone and present false signals. Only when the price continues to hold above or below a given level, for a prolonged period of time, will the signal be valid.

Click on the chart to zoom in.

2. The second chart we're looking at is the ratio of Nifty 50. If you are someone who follows the Indian market alone, you'd wonder what all the fuss was about. To you, the market is not even messy! Take a look at the monthly chart of Nifty 50. We have the highest monthly closing in price with the end of October. India has been outperforming the global market for a while now, and it doesn't seem like that fading away anytime soon.

With the price moving higher, the next level to track is 19,800.

3. The third chart we're looking at is the Nifty 50 10-day High Low breadth chart. For any market trend to sustain, participation is imperative. And participation begins to show in short-term time frames before one can see them in long-term time frames.

Here we have the market breadth building a base. One-third of the Nifty 50 stocks are currently making 10-day highs. There are several stocks that are marking new all-time highs as well. But the major point to take away here is that market participation is improving.

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, 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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