Following on from the analysis presented last night, I wanted to highlight the setups and the technical picture here in Asia.
The first thing to note is that trading in the Middle East was very positive with Dubai closing up 4.3%. This could very well set a positive tone coming into toady's session. I'm sure this rally was in part due to the positive action in the US on Friday night.
The ASX200 has been a notable under performer. The market tried to hold the 4800 level several times last week right on the Daily trendline. However, there was no follow through out of this level and thus a sharp sell off ensued with momentum traders jumping on board. No doubt momentum has been strong on this move down and a new momentum low has been made on the 60mins chart. Thus, the logical trade is to sell the first rally back into the moving averages. However, I must stress that we are now trading right at the key 38.2 Fib Retracement level which is a natural stopping point in the short term. There is also a key pivot at 4550. We must always think about risk/reward and right now I cant justify opening longer term shorts at these levels.
ASX200 Daily:
(UPDATE) The SPI has gapped down, open 4612 and current low 4583. This trend continues down and we may well be headed for the 4550 pivot on the Cash Index. For now, buys should only be considered if we can trade back above the gap at 4615 or if we can hold here right now and show a solid reversal. I am not joining this move down this am as I cant justify the risk reward and I see too many bullish setups elsewhere.
The Hang Seng remains in a clear consolidation pattern on the Daily chart. We may have seen the final leg down of this pattern but ultimately we must wait for a confirmed close above the trendline shown. This is a bullish pattern no doubt and should set a precedent for the rest of the region.
Hang Seng Daily:
Taiwan continues to trade at the low end of its recent range. We are trading at great support levels and I believe this is a great risk/reward area to look for buy setups. Initial entries should be above Fridays open gap at 8650 and then added above 8800. 8450/8500 is key support and this must remain intact for the bullish scenario.
Taiwan 60mins:
The MSCI Singapore index is at a very interesting juncture indeed. Price retested the previous breakdown level at 3650 and failed triggering a possible bear flag. For now we are trading at short term supports and I would like to see clear breaks of 3560/50 before getting short. Ultimately, any move back above 3650 should be seen as a very bullish development and a clear bear trap.
MSCI Singapore Continuous Daily:
For now I don't have a clear view on the Nikkei and I don't trade it- thus I am hesitant to comment. However, I would like to show a very interesting chart of USDYEN. Ultimatly, any more YEN strength will trigger this bearish setup. This is also a trade to buy if we regain the 83 level. There will be a lot of volatility with upcoming announcements etc so tread very carefully for now
USDYEN Daily:
Update- In sum,the SPI has gapped down and trade the levels cited. We are at supports but we have to respect the shorter term down trend and the new momentum lows. Hang Seng Daily continues to condolidate in a bullish pattern and Taiwan is forming a possible inverse Head and Shoulders on the 60mins. I expect most of the action will come on Tuesday so today may be somewhat subdued.
Best of luck
Austin
