Friday, 14 October 2011

Asia Update

I thought I would quickly run through some Asian Daily charts of interest. I think there are many interesting intermediate bottom pattens in place. This should hold us in great stead for the run into Christmas. This fits in with my views of both US and European markets. Sure we are kicking the can down the road, but this is why I choose to trade and not be a fund manager!

Australia Daily:
We have seen a higher low form and a clean breakout from a flag type pattern. The candles thrusts out of this pattern are indicative of a major turning point and strong underlying momentum. Short term we have hit the first target at the 38.2 retrace and some stocks such as FMG, RIO and CBA are overextended. Bigger picture, the target is still right back up to 4500. Remember time is always important in forecasting a market move and we are but in the early stages of a new trend. Look for pullbacks next week.
Australia Daily 2010:
I find this chart interesting. After the panic move out of the high in 2010, we also saw a higher low and candle thrust pattern. This led to a strong rally for a few months into the 61.8 and beyond (although there were good pullbacks along the way).
Shanghai Weekly:
We have seen a strong reversal right out for the 61.8 fib level and previous swing low. The power of Fibonacci.

Shanghai Daily:
This chart shows a clear bullish candle reversal pattern (engulfing) with good bullish divergences in place. If we can break above this trendline, I think this will lead to a sustained rally in coming days. Don't fight a central government that is buying its own stocks.

Japan Daily:
This trade has worked out very well thus far. An ending wedge into support with bullish divergences in place. Still think this trade has a lot more legs to it.

Hang Seng Daily:
I got the initial support level very wrong in this one. However, when support drops, get short and look for the next level. This market put in a climatic low right on the 61.8 fib level. Still wondering if Fibonacci works? Interestingly, this looks like a clear 5 up pattern to me and a deep sharp pullback for a potential bigger picture Wave 2 low. This may still have some time to play out but we have a great low in place.