| Index | Strat | Risk | Target |
| NKY | Flat | ||
| ASX | Flat | ||
| HSI | Flat |
Nikkei 225
Short-Term Technical Outlook
What could have been a clean and clear breakout or reversal has become a source of real tension. The Nikkei 225 has developed a series of higher daily lows over the past three weeks that have clearly put pressure on resistance around 9,000 - which is now the territory of the long-term 38.2% Fib retracement and less defined by the falling trendline going back to October. A breakout is likely due sometime this week; but direction is split. The long-term bias is still dominated by the bear trend going back to the summer 2007 highs. On the other hand, medium-term momentum is still in the bulls’ court. Regardless of the ultimate direction taken, a breakout will struggle for follow through on either side of the recent congestion.
S&P/ASX 200
Short-Term Technical Outlook
The failed attempt to overtake the 38.2% Fib (of the Sept to Mar bear wave) at 3,815 this past week is turning into a potential reversal pattern. The doji that was developed with the temporary breech last Friday looks like a convincing evening star formation that would make for a poignant, long-term reversal. Very short-term support is found at 3,735. We are not likely to see tremendous volatility following a move through this level; but it could set off a chain of events that could develop into a break of the short-term rising trend channel – a far better confirmation of a trend reversal. Of course, if this channel holds up, a daily close above 3,815 would be a strong signal for a long-lasting bull trend.
Hang Seng
Short-Term Technical Outlook
A side effect of high volatility is that otherwise clear technical levels are often rendered impotent by choppy price action that holds little respect for specific levels. The repeated gap above the previous double top at 15,760 high this past Thursday and Friday may signal that this level has been breached; but the fact that the market has held back from follow through suggests submission. What’s more, even if this ill-defined ceiling is forced, we still have the 200-day SMA and a long-term 38.2% Fib at 17,000 to contend with. These two aforementioned technical levels will be far more difficult to surpass should momentum be anything other than steadfast.
Written by: John Kicklighter, Strategist for CFDTrading.com
Questions? Comments? You can email them to John at jkicklighter@cfdtrading.com.
