Japan’s Nikkei 225 Index broke through its medium-term target of 12000. Selling pressure failed to materialize and the index is headed for its long-term target of 14000*.
* Target calculation: 11000 + ( 11000 – 8000 ) = 14000
India’s Sensex found support at 18800. Penetration of the declining trendline indicates a rally to 20200. Breakout would signal a primary advance to 21000*, but bearish divergence continues to warn of selling pressure. Reversal below 19000 would warn of a correction to the primary trendline at 18000.
* Target calculation: 20 + ( 20 – 19 ) = 21
Singapore’s Straits Times Index continues to consolidate below resistance at 3300. Buying support at 3250 is evident from higher volume at the 3250 level. Breakout above 3300 would signal a fresh primary advance, with a long-term target of the 2007 high at 3900*.
* Target calculation: 3300 + ( 3300 – 2700 ) = 3900
Hong Kong’s Hang Seng Index correction found support at 22500. Declining 13-week Twiggs Momentum indicates selling pressure. Expect another test of 22500; failure would signal a test of the primary trendline at 21000.
* Target calculation: 22 + ( 22 – 18 ) = 26
China’s Shanghai Composite also found support, at 2250. Respect would indicate another test of resistance at 2450, while failure would indicate a down-swing to primary support at 1950/2000. Rising 13-week Twiggs Momentum suggests a primary up-trend; a trough above zero would strengthen the signal. Breakout above 2450 would confirm.
* Target calculation: 2450 + ( 2450 – 2250 ) = 2650
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.