Wednesday, 4 May 2011

UPDATE: Shanghai Final Levels

Shanghai Composite Daily:
There are the final support levels for this market. This is key to the health of the region I believe

Asian Setups

Here are a few Daily charts of the various Asian markets I trade. Certainly this rally has been stalling somewhat over the past week which has taken me by surprise. Some markets such as Singapore and Taiwan are testing key support areas whilst other such as India have already broken down. It is going to be an interesting few days that will decided the overall fate of the region I believe.

MSCI Singapore Continuous Daily:
The rally out of the recent flag pattern failed to gather momentum. 3650 is the key support level and price needs to hold here to keep my bullish scenario intact. The reversal out of the recent high does look bearish but until supports break, I want to follow the strong base pattern and the trend by looking for buy setups.

MSCI Taiwan Continuous Daily:
Taiwan looks the strongest market in the region with a bullish inverse Head and Shoulder pattern in place. The low of the recent strong candle at 3100 should offer short term support. I am still looking for a retest of the Daily highs

Nifty Continuous Daily:
The Nifty has sold off strongly since hitting the downward sloping trendline. Price is now testing the previous breakout level. For short term traders, look to get long against this level with very tight stops and join the momentum lower should this area break. The recent range on the 60min chart has broken down and this is bearish for now.

Nifty Cont 60mins:

Shanghai Composite Daily:
Price is beginning to hold at my 2850/2900 support area. If price can trade above the highs of the recent strong down candle, I believe this is a bullish development. In the big picture, this market is still in a sideways consolidation pattern with not clear trend yet

In sum, it certainly does feel like some of these Asian markets are losing momentum. However, as long as the supports identified hold, I will continue to focus on the uptrends in place.

ASX200/SPI Morning Thoughts

Morning All,

Yesterday in the Australian market there was no follow through from Monday's strong bullish reversal. As I stated yesterday, position traders should continue to look for long swings only ABOVE 4840. In the short term, the trend remains down and we are indicated at 4755 in early trade, below yesterdays lows. I do have a strong target area at 4745/4750 for this down move and this really must hold to keep my bullish scenario intact.

SPI 60mins:
4745/4750 is an open gap, an A=C target, the low end of a parallel trend channel, and the 50% retracement level. Thus, this should be a strong confluence of support. However, as ever, wait for price action to confirm and look for price to regain 4765+ as a trigger

SPI 15mins:
We are indicated below yesterdays lows. Look for bullish reversal candles out of 4745/4750 to get long or wait for price to regain 4770. The short term trend is down so use tight stops and be prepared to short and join the momentum if we cannot hold

I must also stress that yesterday was a rather choppy session for the SPI. Indeed, for the first time in several days, every time I hit the new intraday low price failed to follow through to the downside. This shows to me that these levels are being defended and momentum to the downside is slowing. We will soon see today if this is the case once more.

I will post some other Asian setups shortly