Asia: China, Japan and India
By Colin Twiggs
October 9th, 2012 1:00 a.m. ET (4:00 p.m. AET)
The Shanghai Composite Index is consolidating between 2000 and 2150. Descending 13-week Twiggs Money Flow warns of long-term selling pressure. Respect of resistance at 2150 is likely and breakout below 2000 would signal a decline to 1800*.
* Target calculation: 2150 - ( 2500 - 2150 ) = 1800
Shenzhen Composite Index is testing primary support at 800. Again, descending 13-week Twiggs Money Flow indicates long-term selling pressure. Resistance at 900 is likely to be respected, while breakout below primary support would offer a target of 600*.
* Target calculation: 800 - ( 1000 - 800 ) = 600
Japan's Nikkei 225 is testing support at 8650/8700. Respect would indicate a rally to 9200, while failure would complete a double top reversal, signaling a test of primary support at 8200. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure but the long-term picture remains negative. Breach of 8200 would signal a primary down-trend with an initial target of 7200*.
* Target calculation: 8200 - ( 9200 - 8200 ) = 7200
South Korea's Seoul Composite Index is consolidating between 1950 and 2000. Rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 2000 is likely, followed by a test of the year's high at 2050.
* Target calculation: 2050 - ( 2050 - 1900 ) = 2200
India's Sensex is retracing to test the new support level at 18500. Respect would signal a strong up-trend, but even retracement to 18000 would not be cause for concern. Rising troughs above zero on 13-week Twiggs Money Flow indicate buying pressure. Follow-through above 19000 would signal an advance to 21000*.
* Target calculation: 18.5 + ( 18.5 - 16.0 ) = 21.0
Singapore's Straits Times Index retreated from resistance at 3100. Expect another test of support at 3000; confirmed if short-term support at 3050 is breached. Recovery above 3100 would confirm an advance to 3300 — as would a 63-day Twiggs Momentum trough above zero.
* Target calculation: 3000 + ( 3000 - 2700 ) = 3300
Res tantum valet quantum vendi potest
....A thing is worth only what someone else will pay for it.
~ Oskar Morgenstern