Wednesday, June 27, 2012

Morning Market Analysis; Asia Treading Water

The weekly chart of the Chinese market shows that -- although prices are now below the 200 day EMA -- they have steadied above the 32 price level for the last month.  However, the EMAs are acting as technical resistance, momentum is dropping, money is flowing out of the market and volatility is up.  The key here is for prices to hold the 32 price level.  Should they break that level, the next logical price target is 31 and then 30.

The Japanese market hit a two and a half year low at the end of May and have since rallied, hitting resistance at the 10 week EMA.  Like the Chinese market, the underlying technicals are weak: momentum is declining and the CMF is negative, while volatility is increasing.

Hong Kong is a bit stronger.  Prices did break an uptrend started in the third quarter of law year, but prices remain above the 200 week EMA.  Momentum is slightly negative, as is the CMF.

Taiwan's market is in similar shape to Hong Kong's, although prices are below the 200 day EMA rather than above it.

Singapore's market is also just above the 200 day EMA.  However, it has hit resistance at the 10 week EMA.

The good news in the above charts is that prices have stabilized over the last month or so.  In addition, two of the markets are still above their 200 week EMA.  However, the elephant in the room is China, which is still below its 200 week EMA and has several weak technical developments.