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Asian Markets Open Strong

By Colin Twiggs
November 16, 2:30 a.m. ET (6:30 p.m. AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.


The Dow Industrial Average continues to rise, but the ascending broadening wedge warns of a correction back to 9000. Asia-Pacific markets remain positive, however, with the Shanghai Composite and Hang Seng gapping up at Monday's open and the ASX rallying after two days of weakness.

China

The Shanghai Composite Index gapped up Monday, rallying to 3275 by the close. Breakout above the upper trend channel indicates an accelerating up-trend, with a target of 3500. Rising Twiggs Money Flow (21-day) continues to indicate a resurgence of buyers. Reversal below 3100 is unlikely, but would warn of another test of the lower trend channel.

Shanghai Composite Index China

The Hang Seng Index is testing the upper border at 23000 after also gapping up at Monday's open. The rising wedge, however, warns of reversal back to the base of 19500. Twiggs Money Flow (21-day) holding above zero indicates buying support. Breakout above the upper border is unlikely, but would offer a target of 24500*.

Hang Seng Index Hongkong

* Target calculation: 23000 + ( 21000 - 19500 ) = 24500

India: Sensex

The Sensex is headed for a test of resistance at 17500. Respect of resistance would signal another test of 15000, while breakout would offer a target of 20000*. Declining Twiggs Money Flow (13-week) warns of continued selling pressure.

Sensex India

* Target calculation: 17500 + ( 17500 - 15000 ) = 20000

Japan: Nikkei

The Nikkei 225 consolidating below 9800 warns of a test of primary support at 9600. Declining Twiggs Money Flow (13-week) indicates selling pressure. Failure of support at 9600 would signal a primary down-trend.

nikkei 225 japan

South Korea

The Seoul Composite is consolidating below resistance at 1600. Breakout below the lower trend channel would warn that the primary up-trend is weakening. Twiggs Money Flow (21-day) holding below zero indicates continued selling pressure.

Seoul Composite Index

Australia: ASX

The All Ordinaries short (2 days) retracement is a bullish sign. Breakout above 4800 would offer a target of 5000, close to the upper border of the broadening wedge consolidation. A failed swing, reversing below 4700, is less likely, but would warn of a secondary correction with a target of 4000*. Twiggs Money Flow (21-day) recovery above zero would confirm buying pressure.

ASX All Ordinaries

* Target calculation: 4500 - ( 5000 - 4500 ) = 4000

The ASX 200 also displays a broadening wedge. Expect a rally to test the upper trend channel at 5000. Twiggs Money Flow (13-week) holding well above zero indicates buying support.

ASX 200


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