[Premium] Three Charts For The Week Ahead

Last week we focused on Crude Oil, Nifty 50 relative to Corporate Bonds, and India RRG chart analysis.

Let's move into this week's topics.

1. The first chart we’re looking at is that of the Shanghai Composite. The price has been displaying resilience in recent times, even as economies across the globe were correcting. In the week gone by, the price moved towards its overhead resistance close to the level of 3,700. Now, this is significant with respect to what happens here.

The price has been testing these levels in the recent past and has turned away from these levels on four occasions as can be seen in the chart. What we know is that the more times a level is tested, the more likely it is to break. So if the price does move past this resistance, we would see an important sign coming through one of the biggest economies in the world. This would give more impetus to the market rally, adding to the positive sentiment. Which way the price goes from here, could be crucial going forward.

2. The second chart we're looking at is the performance comparison chart of Nifty 50, Nifty Midcap, Nifty smallcap, Nifty 500 from October 18th, 2021. Nifty 50 peaked out on October 18th, along with major market indices. We're taking a benchmark period for relative comparison to find the outperforming/ underperforming market segment. When the correction started, smallcaps were the worst performers. Over the past two weeks, when the market has gained a little strength, they fared better than Nifty 50.

Due to the fractal nature of the trend, a similar pattern can be observed on an extended period trend too.
Smallcap index is among our favorite market risk appetite indicators. In this post, we've detailed the critical level for these indices.

3. The third chart we’re tracking is Nifty Media. This sector has been among the top performers in recent weeks and continues to show strength. With the price moving past the resistance of 2000 and the follow-through move playing out, this sector has raised its head above the water only now.

The next level to track going forward would be 2,650. How the price reacts around these levels would be interesting to see since 2,650 has acted as a good resistance in the past. We'd like to keep an eye on this sector to see if the strength we're seeing persists, or deteriorates.

In our view, these charts will help set the tone for this week and provide us with 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