Asia: Markets bouyed by stimulus

By Colin Twiggs
September 10th, 2012 2:30 a.m. ET (4:30 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.

Markets jumped Friday on announcement by the ECB of government bond purchases and China unveiling further stimulus measures. The Shanghai Composite is testing the first line of resistance at 2150. Respect of 2250 would warn of another down-swing, while penetration of the (secondary) descending trendline would indicate the primary down-trend is weakening. 63-Day Twiggs Momentum, a long way below zero, continues to reflect a primary down-trend.

Shanghai Composite Index

* Target calculation: 2150 - ( 2500 - 2150 ) = 1800

Hong Kong's Hang Seng is again testing resistance at 20000. Upward breakout plus 63-day Twiggs Momentum recovery above zero would indicate an advance to 22000. Respect of resistance is unlikely, but would test primary support at 18000.

Hang Seng Index

India's Sensex recovered above 17500, indicating an advance to 18500. A trough above zero on 13-week Twiggs Money Flow would indicate buying pressure.


* Target calculation: 17.5 + ( 17.5 - 16.5 ) = 18.5

Singapore's Straits Times Index found support at 3000. Respect would indicate a test of the upper trend channel, but the lower peak on 63-day Twiggs Momentum suggests a ranging market. Breach of support at 3000 would re-test the lower trend channel.

Straits Times Index

The long tail on last week's Nikkei 225 candle indicates short-term buying pressure and recovery above 9200 would signal an advance to 10200. 13-Week Twiggs Money Flow below zero, however, continues to indicate long-term selling pressure. Recovery above zero would reverse the signal, while failure of primary support at 8200 would confirm another down-swing.

Nikkei 225

* Target calculation: 8000 - ( 9000 - 8000 ) = 7000

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