[Premium] Three Charts For The Week Ahead

JC Parets
January 18, 2023

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 $DXY, MCX Natural Gas, BSE IPO

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 MCX Gold Future. Here price has a breakout about the key resistance level at 55,500 with bullish reading on the momentum indicator. All time high of 60,458 would be the level to watch out for.
Earlier, we discussed that Gold has been gaining strength in all major currency denominations. Interestingly, Gold in USD currently challenges a price level engrained in goldbugs' minds worldwide which is the prior commodity supercycle peak! It's back at the scene of the crime – the 2011 high at approximately 1,924. Those former highs mark the height of the prior commodity supercycle (as far as Gold's concerned) and the ideal level to have exited long positions. Not many sold the top, of course, reinforcing its psychological significance.
Twice bulls have managed to push price above that critical level. And twice, those rallies failed to produce sustained uptrends. It would be a key level to watch, no matter what currency you follow.

Click on the chart to zoom in.

2. The second chart we're looking at is ASC Industrial Index. The Industrial continues to uphold its strength amid the market's indecision. It is outperforming relative to Nifty 500 as well. This development bodes well for this sector's Capital Goods, Industrial Manufacturing and Electrical Equipment stocks.

3. The third chart we're looking at is ASC Insurance Index. This Industry group of the financials sector has been consolidated for a long time. Now it has been showing strength with participation from constituent stocks. The price has been posing the breakout above the critical level of overhead supply. The constituent stock like SBI Life, ICICI Prudential and Max Financial has been close to the base breakout level. That is our level of interest in these stocks.

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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