Asia rallies while ASX smoulders

By Colin Twiggs
November 20th, 2013 2:00 a.m. ET (6:00 p.m. AEDT)

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India's Sensex found support at 20200 before rallying to test resistance at 21200. Breakout above its 2007 and 2010 highs at 21000 would confirm the primary advance, offering a target of 24000*. Rising 13-week Twiggs Money Flow suggests medium-term buying pressure. Reversal below 20200 is unlikely, but would warn of a correction to primary support at 18000.


* Target calculation: 21000 + ( 21000 - 18000 ) = 24000

Japan's Nikkei 225 broke through resistance at 15000, but bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Expect retracement to test the new support level. Respect of 15000 is unlikely, but would confirm the primary up-trend, with a long-term target of 17500*. Reversal below the rising trendline would test primary support at 13200, warning of trend weakness.

Nikkei 225

* Target calculation: 15000 + ( 15000 - 12500 ) = 17500

Singapore's Straits Times Index respected support at 3000 on the monthly chart, but is struggling to make an impression on long-term resistance at 3300. 13-Week Twiggs Momentum below zero continues to warn of a primary down-trend. Breakout above 3300 is unlikely at present, but would signal a primary advance to 3600*.

Straits Times Index

* Target calculation: 3300 + ( 3300 - 3000 ) = 3600

China's Shanghai Composite is testing resistance at its upper trend channel. Follow-through above 2200 would indicate the correction is over and a test of 2270 is likely. A down-swing to test the lower channel is just as likely, however, and would indicate continuation of the correction. Completion of a 21-day Twiggs Money Flow trough above zero (say > 15%) would signal medium-term buying pressure. Breakout above 2270 may be some way off but would signal a primary up-trend.

Shanghai Composite Index

Hong Kong's Hang Seng broke resistance at 23500, signaling a primary up-trend. Follow-through above 24000 would confirm, offering a medium-term target of 24500 and a long-term target of 28000*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Reversal below 23500 is unlikely, but would warn of another test of 22500 or the primary trendline.

Hang Seng Index

* Target calculation: 24000 + ( 24000 - 20000 ) = 28000

The ASX 200 is testing medium-term support at 5300. Penetration of the rising trendline, would warn of a correction. Bearish divergence on 21-day Twiggs Money Flow suggests selling pressure.

ASX 200

The monthly chart shows a correction would be likely to test the secondary rising trendline around 5000. Recovery above 5400 is unlikely at present, but would signal an advance to 5600*.

ASX 200

* Target calculation: 5450 + ( 5450 - 5300 ) = 5600

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~ Aristotle