[Premium] Three Charts For The Week Ahead

Last week we focused on Nifty PSU Bank/Nifty100, Nifty Infra, Nifty CPSE.

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 FMCG. The index is making a new all-time high as we speak! Although we see new highs here, this is coming on the back of limited participation from within the sector. Nifty FMCG relative to Nifty 500 has been in divergence for over five months. We haven’t reached that point where a majority of FMCG stocks outperform the market at large. Only a sustainable trend here would lead to that at the stock level.
We are watching this closely to see if relative strength comes in this sector.

Click on the chart to zoom in.

2. The Second chart we’re looking at is Nifty Bank Index. It continues its all-time high closing streak after breaking above the year-long base. The momentum is in the bullish regime, with participation from public and Private sector banks. We are bullish above 42,777 for the target of 59,263. Financial holds a significant weightage in the Nifty 500. So, strength in this index is positive for both financials and the broader market.

3. The third chart we’re looking at is the Nifty PSU Bank index. Last week it made a 5-years high with momentum in the bullish overbought territory. The current level poses an overhead supply from 2015 and 2017 high at 4,000 - 4,500. It would be a critical level to watch out for.
Since March 2020 lows, it has been in a strong uptrend. We need to continue riding it till it persists with higher highs.

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