[Premium] Three Charts For The Week Ahead

October 18, 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, ASC Leisure Index, MCX Crude Oil

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 iShares MSCI ACWI ex US ETF ($ACWX). This ETF comprises large- and mid-capitalization developed and emerging market companies, excluding U.S. equities. Last week it recorded a new 52-week low. The current momentum is bearish, with the RSI indicator in an oversold range for months. The price is testing the critical Fibonacci level of 38.2% at 40.5, which is also a prior support level. For a bullish market environment, we need stocks to stop going down. So sustenance above this level would be positive for global markets.

Click on the chart to zoom in.

2. The second chart we're looking at is the iShares Emerging Market Corporate Bond ETF. It tracks the U.S. dollar-denominated, emerging market corporate bonds with 4.72% exposure to India. $CEMB bounced back from the critical support of March 2020 lows, where the last bear market ended, but it failed to hold on to that level. Emerging market bonds are among the riskiest in the fixed-income universe. So, a continuous drawdown in $CEMB doesn't favour the strength of the Nifty Smallcap Index. Currently, the Nifty Smallcap is fighting the overhead supply near the 2018 high with a downward-sloping 200-day moving average. A confirmed close above these technical developments would be our first risk-on signal.

3. The third chart we're looking at is Sugar No. 11 Futures. The Sugar No. 11 contract is the world benchmark contract for raw sugar trading. The contract prices the physical delivery of raw cane sugar, free-on-board the receiver's vessel to a port within the country of origin of the sugar. It has been consolidating at the key support level and showing momentum for the upside. Any strength in price would be positive for Indian sugar-related stocks.