Asia-Pacific: ASX breaks support

By Colin Twiggs
January 28th, 2014 3:00 a.m. ET (7:00 p.m. AEDT)

These extracts from my trading diary are for educational purposes. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as advice to buy, sell, hold or otherwise deal with any securities or other investments. Accordingly, no reader should act on the basis of any information contained therein without first having consulted a suitably qualified financial advisor. Full terms and conditions can be found at Terms of Use.


China's Shanghai Composite Index found short-term support at 2030 on Tuesday, but another test of the primary level at 1950 appears inevitable. Declining 13-week Twiggs Money Flow warns of selling pressure. Breach of support at 1950 would offer a target of the 2008 low at 1700*.

Shanghai Composite Index

* Target calculation: 1950 - ( 2200 - 1950 ) = 1700

India's Sensex displays strong resistance at its 2007 and 2010 high of 21000, with several failed attempts at a breakout. Reversal below 20500 would warn of another correction to the primary trendline. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure typical of a consolidation.

Sensex

* Target calculation: 21000 + ( 21000 - 20000 ) = 22000

The ASX 200 broke support at 5200, signaling another correction. Reversal of 21-day Twiggs Money Flow below zero suggests short-term selling pressure. Recovery above 5250 is unlikely, but would indicate a bear trap. Failure of primary support at 5050 would warn of a primary down-trend.

ASX 200

The monthly chart illustrates the importance of primary support at 5000. Breach would confirm the down-trend, suggesting a fall to the long-term trendline, around 4600.

ASX 200

* Target calculation: 5300 + ( 5300 - 5200 ) = 5400

The ASX 200 VIX rose sharply, but (below 20) continues to reflect low market risk.

ASX 200

Men acquire a particular quality by constantly acting a particular way... you become just by performing just actions, temperate by performing temperate actions, brave by performing brave actions.

~ Aristotle