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Stocks bullish but India threatens reversal
By Colin Twiggs
April 30th, 2015 7:30 p.m. AET (3:30 a.m. EDT)
Advice herein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs. Accordingly, no reader should act on the basis of any information contained herein without first having consulted a suitably qualified financial advisor.
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A slight change to our normal routine. The next portfolio update for Research & Investment will be on 8th May 2015. If all goes well, future updates will be scheduled on the second Wednesday of each month.
India's Sensex is testing primary support at 27000 with 13-week Twiggs Money Flow below zero warning of a reversal. Breach of primary support would signal a primary down-trend; follow-through below 26500 would confirm. Recovery above 29000, however, would suggest that this is simply a mid-point consolidation below 30000.
Apart from India, Asia and North America are bullish. But concerns over Greece weigh on Europe. Australia continues a tentative advance.
The S&P 500 is hesitating at the 2120 resistance level, upper border of a bullish ascending triangle. But long tails on the last two candles indicate support at 2100, a bullish sign. Breakout would confirm an advance to 2200*. 21-Day Twiggs Money Flow has leveled off after the recent decline. Recovery would form a large trough above zero, another bullish sign. Penetration of the rising trendline is less likely, but would warn of a correction.
* Target calculation: 2120 + ( 2120 - 2040 ) = 2200
Same as usual. CBOE Volatility Index (VIX) indicates low risk typical of a bull market.
Canada's TSX 60 continues to test long-term resistance at 900. Narrow consolidation above 890 is a bullish sign. 13-Week Twiggs Momentum holding above zero also suggests a primary up-trend.
* Target calculation: 900 + ( 900 - 800 ) = 1000
Germany's DAX is undergoing a correction, likely to test support at 11000 and the primary trendline. Declining 13-week Twiggs Money Flow suggests medium-term selling pressure.
The Footsie is testing support at 6950/7000. Breach would warn of a correction with initial support at 6700. Declining 13-week Twiggs Money Flow similarly indicates medium-term selling pressure. Respect of the rising trendline at 6950 is unlikely, but would be a bullish sign, signaling a fresh advance.
* Target calculation: 7000 + ( 7000 - 6000 ) = 8000
A monthly chart shows the extent of the Shanghai Composite's exponential rise. Rising 13-week Twiggs Money Flow indicates buying pressure. Skyrocketing margin lending does not indicate a reversal, but does warn of fragility.
* Target calculation: 3500 + ( 3500 - 2500 ) = 4500
Japan's Nikkei 225 Index continues to test the new support level at 19500/20000. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Respect would indicate an advance to 21000 and a long-term target of 22000*. Penetration of the rising trendline is unlikely.
* Target calculation: 20000 + ( 20000 - 18000 ) = 22000
The ASX 200 is testing 5750. A long tail on today's daily candle indicates a fair measure of support. Decline on 13-week Twiggs Money Flow is also mild. Respect of 5750 would indicate another test of 6000. Breakout above 6000 would offer a target of 6250*. Breach of support at 5650, the September peak, is unlikely, but warn of a strong correction.
* Target calculation: 6000 + ( 6000 - 5750 ) = 6250
There are decades where nothing happens; and there are weeks where decades happen.
~ Vladimir Ilyich Lenin
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