Hong Kong’s Hang Seng Index broke long-term resistance at 24000, signaling a primary advance with an intermediate target of 27000*. The recent 13-week Twiggs Money Flow trough at zero indicates long-term buying pressure. Expect retracement to test the new support level. Reversal below 24000 is unlikely, however, and would warn of a correction to the rising trendline.
* Long-term target calculation: 24000 + ( 24000 – 21000 ) = 27000
Singapore’s Straits Times Index likewise broke resistance at 3300, signaling a primary advance to 3600*. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Again, expect retracement to test the new support level, but reversal below 3200 is unlikely and would warn of another test of primary support at 3000.
* Target calculation: 3300 + ( 3300 – 3000 ) = 3600
China’s Shanghai Composite Index broke resistance at 2150 as the PBOC aggressively injects bank credit to revive a flagging economy. This may lift the medium-term outlook, but is not sustainable in the long-term and could well aggravate the eventual contraction. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure. Breakout above 2250 would confirm a primary up-trend. Reversal below 2100 is unlikely at present, but would warn of another test of primary support at 1990/2000.
* Target calculation: 2000 – ( 2150 – 2000 ) = 1850
India’s Sensex is retracing to test the new support level at 26000. Breach would indicate a test of 25000. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure. Failure of support at 25000 would warn of a correction to the primary trendline at 23000. Respect of (or recovery above) 26000, however, would offer a target of 27000*.
* Target calculation: 21000 + ( 21000 – 15000 ) = 27000
Japan’s Nikkei 225 is testing 15500. Breakout from the consolidation of recent weeks would indicate a rally to 16000*. Oscillation of 13-week Twiggs Money Flow above zero indicates healthy long-term buying pressure. Reversal below 15000 is unlikely, but would warn of another test of primary support at 14000.
* Target calculation: 15000 + ( 15000 – 14000 ) = 16000