[Premium] Three Charts For The Week Ahead

JC Parets
May 29, 2021

We retired our "Five Bull Market Barometers" in mid-July 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 Euro Stoxx 50, Nifty 500, & Nifty Realty.

Let's move into this week's topics.

1.  The first chart we're looking at is Nifty 50. In the week gone by, Nifty 50 managed to clock a new all-time high of 15,469.65. With the index getting out of its consolidation, the market seems like it has picked a side. Will the market rally from here on? It depends.

What is important to track this week is if it continues to trade above its prior high of 15,431. Only a sustained price move can confirm this breakout, so we're keeping a close eye on this one.

If the index gives up its gains quickly, then we're back in the sideways trading range.

Click on chart to enlarge view.

2. The second chart we're looking at is Crude oil Futures (in dollars). Crude oil is the largest component of the CRB index that tracks the commodities basket. A breakout in Crude oil could propel the asset class higher as the market rally progresses.

The price seems like it has moved past its resistance of 66. This is the level we're tracking- Crude Oil above 66 is positive for the commodity market. The next target to track in that case would be 76.

However, if the price fails to hold on to higher levels, then we'll be back below the overhead resistance as commodities find their way through the market mess.

3. The third chart we're looking at is the CRABS Index. This custom index comprises ETFs of Canada, Russia, Australia, Brazil, and South Africa. Essentially this is a commodity heavy index. These countries have major exposure to commodities and tend to outperform when a commodity rally gets going.

This index making new highs adds to the narrative of commodities getting stronger going forward. Again, what we'd like to see is this ratio moving higher and holding on to those levels.

We're keeping an eye on this one along with all the other commodities to see if there's any signal that we can identify.

In our view, these charts will help set the tone for this week and provide us information on how we should approach the market in the coming weeks.

Also, make sure to 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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