The best part about the end of the month is that there's always a fresh batch of Monthly Charts waiting for us. We only perform this exercise once the candlesticks are completed, which in this case was Thursday April 30th. It takes me about half an hour to get through them all, which represents roughly 6 hours of my entire year's work. I promise you from the bottom of my heart that there is no single part of my entire process that I find more helpful than this monthly chart review.

You see, this process forces us to take a step back, and gives us no choice but to identify the direction of the primary trends. We use these to put shorter-term trends into context. So no matter what your timeframe is, I think first identifying primary trends, and then working our way down from there, is a huge advantage over a blind bottoms/up approach.

Here are the things that stood out most during my review:

From the desk of Steve Strazza @Sstrazza

There has been a lot of chatter about the outperformance from Health Care recently. One of the industry groups benefitting from this strength has certainly been Biotechs so we're going to dive into that space today and take a look under the hood.

This week's Mystery Chart is a long-term ratio chart of the Nasdaq Biotech ETF (IBB) relative to the Nasdaq 100 (QQQ). Thanks to everyone for participating. Responses were pretty mixed this week as the chart is at a bit of an inflection point as it tries to hammer out a bottom at key prior lows from 2007-08 and 2011.

Monthly charts help us focus on the long-term trend when volatility on lower timeframes picks up.

In this environment there are a lot of messy, sideways charts out there, so we're going to look at the clearest trends and focus on those.

Yesterday we outlined the sector rotation that's occurring out of winners and into beaten-down stocks. Given the follow-through in US markets, we expect that to continue in India as well.

Since most of our upside risk management levels have been broken, our broader short thesis is no longer valid. The short-term momentum remains to the upside, so let's talk about what sectors will benefit and the next logical target for the major indexes.

Chris Ciovacco is someone whose work I've followed for many years. His approach to markets is similar to mine, in that he incorporates a weight-of-the-evidence technical strategy. His open-mindedness and ability to set up multiple outcomes to prepare for, is one to be admired. In this episode, Chris walks through his thought process when analyzing the current environment. He makes a great comparison to early 2009 and asks whether we're in January '09, just before another severe decline in stocks, or in May, on the way up after already bottoming.

If you are caught between a rock and a hard place, you are in a difficult situation where you have to choose between two equally unpleasant courses of action.

In many Indian stocks that is exactly where many market participants find themselves.

Let's take a look at why.

Interest Rates continue to stabilize in the US and globally, setting the stage for rotation into several beaten-down areas of the Equity market...particularly in small banks.

This was a risk to our near-term bearish thesis and suggests the major indexes could push marginally higher in the very short-term. And while we ultimately believe further weakness is ahead over the intermediate-term, we have to acknowledge and monitor this rotation under the surface to see how it develops.

Several stocks we're watching could benefit from this "dash for trash" trading environment taking place in the market. Not only are they attractive reward/risk opportunities on their own, but more importantly, how they perform will provide important information about risk appetite and the potential for the market to extend further to the upside. It's the same reason we were monitoring Autos and Media earlier in the month.

The Nifty IT Index remains subdued due to weakness in its largest components, like Tata Consultancy, but under the surface, there's been leaders like Info Edge (Naukri) trending well on an absolute or relative basis.

With that said, several charts are suggesting this leader may be transitioning into a laggard.

Let's take a look at the chart that sparked this thesis.

Below is a weekly chart of Info Edge (Naukri) relative to the Nifty Next 50. Since its breakout to new all-time highs in early 2014, we've seen the Fibonacci Extensions from its 2008-2009 base serve as solid support/resistance levels. Recently, prices hit our fourth upside objective at the 423.6% extension near 0.1056 and have not exceeded it yet.

Click on chart to enlarge view. 

Did you notice how Stocks, Bonds and Gold are all at or near 34-day highs?

Here is an update to our Bull Market Checklist of 20 Items.

*Note: The Sensitivity column represents how close the asset is to the risk level in question

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, April 24, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

This week we want to highlight the continued divergence between Energy stocks and Oil using our Sector and Industry ETF and Commodity tables.

First, let's look at some of the longer-term leaders. Biotechs (IBB) just broke out to fresh multi-year highs and are one of the top performers on our Industry ETF list across all timeframes.

Aside from Gold Miners (GDX), they are the only industry on our expanded list of over 50 ETFs already back at fresh 52-week highs. Definitely some relative strength worth paying attention to in these areas.

Be sure to read our recent post on Gold Miners.

The Nifty Financial Services Index continues to show relative weakness.

In this post, we're going to update our risk management levels, targets, and discuss the components within the index that are showing the most relative strength and weakness.