JAPAN NIKKEI225(9434):
It did a volte face last week and gave a gap open beyond its formidable resistance 9000, accompanied by big volume. All this has been happening here inspite of its big corporates giving dismal earnigns outlook. So, it is yet to be seen if this gap up was breakaway or not! But it is more likely that the far east markets are reflecting the positive effect of their stimulus packages of the recent past.
This index faces stiff resistance in the area 9600-9650. This resistance band is not far from the current level and the global momentum also is supportive. Still it would be prudent to remain vigilant until it closes firmly above here. On the other hand, if it does give a firm weekly close as desired, then it would have confirmed a double bottom for itself(encircled) and also confirmaion of reversal to primary uptrend. Watch out! Then it would be headed towards 12200 in the medium term.
Supports are at 9095, 8985 and 8870. Buy on declines but desist from initiating fresh longs on a close below the first support. Traders watchout for a rebound from the second support, in case of a decline. The uptrend loses momentum only on a close below 8870.
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CHINA SHANGHAI COMPOSITE(2626)
So far, this index has been displaying all the characteristics of a reversal to primary uptrend. But this would be confirmed more once we measure the intensity and magnitude of a correction which should ensue after this continuous uptrend since November. At the moment it is not showing any desire to undergo correction because the global trend is helping and has developed multiple supports on its way up.
It faces stiff resistance at 2725. If it manages to move above here then the next target is 2975.
Supports for the week ahead are 2608 and 2591. Buy on declines with second support as stop loss. The immdiate uptrend would lose momentum if it could not hold support at 2533 on closing basis. Next major support area is 2500.
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HONG KONG HANGSENG(17390)
Similar to Nikkei, this index is also making an effort to qualify for a double bottom. It seems to have done that already by closing above its range as it has moved above the given blue line on the chart. Still we would need confirmation by waiting for another weekly close above this line.
This index faces stubborn resistance in 18520-18530 area. Will it or wont it is the moot question. The momentum is strong and sentiment is upbeat though the asian markets are ripe for a correction also. But trend is friend until and unless the crucial supports are breached.
If it manages to break through the 18520-18530 band then it would be headed towards it medium term targets of 20000 and 23000.
Immediate Supports are at 16995, 16855 and 16715. Immediate term traders should not initiate fresh longs on a close below 16855. High risk appetite traders can buy on declines upto 16300 with this support being the stop loss mark on closing basis.
Disclaimer: The usual disclaimer applies as is given on this blog intermitently.
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