[Premium] Three Charts For The Week Ahead

JC Parets
May 9, 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 Saudi Arabia, EURINR & Nifty IT.

Let's move into this week's topics. We have big important breakouts to track this week.

1. The first chart we're looking at is the US Dollar Index, because guess what? We may have another breakout on our hands. The price is currently trading around the breakout point of 103.80. If this level is conquered, then 108 is not too far. And honestly, with the momentum in this thing, it wouldn't be surprising either. Just take a look at the momentum pane. We are also not only looking at a 7-year breakout, but actually a massive 19-year breakout! You read that right, a 19-year breakout.

This move, however, would have ramifications. We could see the impact on stocks, particularly in the emerging economies.

2. The second chart we're looking at is Nifty Small-cap 100. The price is now trading below the 2018 highs. Remember how much we emphasized the importance of the 2018 highs? It was when risk-on assets across the globe peaked and rolled over. For the broader market sentiment to remain intact, it is important that the price hold on to the 2018 highs. Well, that doesn't look like it's happening right now.

Is this a fake breakdown, or is this the trend going forward? We'll have to wait and watch. But one thing is for sure, small caps are a high-risk group of stocks at the moment.

3. The third chart we're looking at is Crude Oil in INR. The price has been hovering around its breakout level for a while now. We saw the price move higher and lower over the past few weeks but it has managed to sustain above 7,785 in the recent past. With this move, if the price continues to consolidate above the Fibonacci level, there is a good chance that we may see a rally going forward.

Remember, the price is sustaining above an important level. That is always information.

We are bullish only above the level of 7,785 with a target close to 12,100.

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

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