As February is kicking off, we believe it is a great time to review the most amazing stock charts globally. As said before, we believe the worst in the markets is behind us. Not that volatility is set to disappear, but we believe long term bottoms are in. We explained the very high correlation between crude oil (specifically periods of panic) and stock market corrections, especially since August 2014. Crude is now unleashing pressure on stock markets globally, at least according to our indicators.
That said, there are 3 stock charts which fall in the “must see” category.
First, our favorite, the stock market in India looks amazing. Its megaphone pattern is about to resolve (in a breakout or breakdown). Given the correlation between emerging stock markets and crude oil, we believe India will break out soon! The chart pattern is great, admittedly.
Next, Japan has successfully tested long term support. The concerning fact on its chart is that it is still trading below its 90 WMA, as well as its recent pattern of lower highs. With the risk of sounding repetitive, crude should unleash pressure on the Japanese stock market, favoring a bullish outcome.
Lastly, a general chart about global stock markets. All stocks globally, represented byt he FTSE All World Index (FAW), have tested long term support in January. Horizontal support has held, but the uptrending support line was broken. So this is a so-so situation. Given the previously discussed correlation between crude and stocks, there has a high probability of a false breakdown (similar to the ones discussed in this article). If that will be the case, the bounce at horizontal support will be really amazing.