[Premium] Three Charts For The Week Ahead

December 7, 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 vs Small Cap, Nifty 50 vs Nifty 10-year Benchmark G-Sec Index, & Nifty IT.

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 Nifty PSU Banks relative to Nifty 100. PSU Banks have had the most stellar year and they continue to display strength as seen in the chart below. While on an absolute basis, the index is trading at 5-year highs, on a relative basis too, the index is not far behind, trading at 4-year highs. This, along with the bullish momentum is alluding to continued strength in the space. There have been plenty of base breakouts and if this trend persists, we could witness historical highs soon!

Click on the chart to zoom in.

2. The second chart we're looking at is Nifty Infrastructure. After close to one and a half years of a sideways move, we FINALLY have a breakout on our hands! Now, this hasn't been out of the blue, since we've seen several index constituents break out of giant bases. But just so you know, these are price levels we haven't seen since 2008. 2008!! So we're essentially looking at a 14-year base breakout, folks!

The bullish thesis is valid above the risk management level of 5,265. The next target to track is 6,055.

3. The third chart we're looking at is the Nifty CPSE. Well well well, what do we have here? Just another big base breakout! Nifty CPSE closed the month of November above an extremely important resistance zone of 2,770. With this close, the price is currently trading at an all-time high! We've been toying with this level for 7 months and lo, and behold, the breakout is here!

A sustained move above the risk management level of 2,770 could take the price higher towards 3,775.