Tuesday, 5 July 2011

Asian Market Update

I thought I would run through some Daily charts of the major Asian Indices and update the technical picture since my last major post: http://swingtradersedge.blogspot.com/2011/06/why-i-still-like-asia.html. That post proved timely indeed and we have seen a pretty strong thrust higher. The power of failed technical patterns hey! I do believe we have higher to go still but it looks like it may be time to take a bit off the table in the short term.

I love the simplicity and effectiveness of Daily charts. They really do offer such a clean overview of price action and the battles won on a day to day basis. Regardless of whether you are a short term intraday trader or monitoring longer-term positions, much preparation must be done when the markets are closed and Daily charts should be that starting point.

Shanghai Composite Daily:
A great double bottom trade and bear trap on the close back above 2650. I think the short term target for this index is 2850 to 2900 and then we see. A great illustration of the amount of money that can be made by looking for "test" trades and low risk turns.

Hang Seng Daily:
The breakout trade above the 22k level proved to be a great one. With a gap up like this right into the 38.2 fib retracement, you just have to take some off the table. Short term I think 22,900 to 23,000 will prove good resistance. Ultimately, this could advance right back up to the top end of the channel but that is some way off yet.

India BSE 30 Daily:
This market has surged off the double bottom trade right into overhead resistance. The trade now is to take some off the table and look for either i)short term scalp shorts vs this downward trendline ii) the bigger picture breakout trade

Nikkei Daily:
Successful breakout right into the 10k target. I would be out of this market here and possibly even looking for double top short

Strait Times Daily:
Great bounce out of the upward trendline and breakout trade. Price is now rallying right into the overhead downward trendline. Similar to India here.

ASX200 Daily:
And finally to Australia. This is the laggard of the region and I believe it will remain this way for the foreseeable future. High rates and a high dollar do not lend themselves to overseas flows which are integral to getting a market really juicing. Furthermore, we have an inept government who do everything in their power to worsen our economic fortunes (rant over). Anyway, I still think this market has higher to rally but it will be stop and start as I have been stressing. Still looking for 4700 to 4750 and then we will see.

In sum, bulls should be tightening up risk as we move into the cited res zones. I find the best swing trades last for a period of 7 to 10 days and it has been a great run out of all these failed technical patterns and double bottoms.