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Asia-Pacific Markets Charting Asia with Daryl Guppy

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  Tuesday, 27 Dec 2011 | 9:01 PM ET

Downtrend in Hang Seng to Continue: Charts

Posted ByDaryl Guppy
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Hong Kong’s Hang Seng Index retains its volatility, but remains in a strong downtrend. This provides short term long side trades, and longer term short side trades. A retest of the 2008 lows cannot be excluded.

The first observation about the Hang Seng is obvious, but still ignored by many. The Hang Seng is not a substitute for trading the Shanghai Index. The behavior is very different. Starting at the end of the first quarter in 2011 the Hang Seng developed a strong and persistent downtrend.

The downtrend line is the dominant feature on the chart. This line is the ultimate cap on every rally in 2011 and it will be the most important rally cap in 2012. This is a well-established resistance level. A breakout above this line will signal a major change in the trend and will be the most important long-side trading signal.

The fall is defined by the trend line, but the limits of the fall are defined by the support and resistance levels. The most significant current support level is near 17,200.

A sustained fall below this level has support near 15,800, which is the level of the small consolidation band following the depths of the 2008 collapse. This is as market well on the way to retesting the 2008 lows.

Traders can enjoy the rallies, but they must keep a close eye on the resistance levels, and the value of the downtrend line. These are reaction points and the points for taking profits from long side trades.

On balance we are bearish on the Hang Seng but we also look for evidence of consolidation and a powerful move above the downtrend line to signal its time to take long side positions.

Daryl Guppy is a trader and author of Trend Trading, The 36 Strategies of the Chinese for Financial Traders –www.guppytraders.com . He is a regular guest on CNBC's Asia Squawk Box. He is a speaker at trading conferences in China, Asia, Australia and Europe.

If you would like Daryl to chart a specific stock, commodity or currency, please write to us at ChartingAsia@cnbc.com . We welcome all questions, comments and requests.

CNBC assumes no responsibility for any losses, damages or liability whatsoever suffered or incurred by any person, resulting from or attributable to the use of the information published on this site. User is using this information at his/her sole risk.

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  Tuesday, 13 Dec 2011 | 7:38 PM ET

Europe Blue Chip Stocks Could Drop Another 20%: Charts

Posted ByDaryl Guppy

The Euro Stoxx 50, the leading blue chip index for the euro zone, has seen steep declines so far this year given the region's debt crisis. Based on technical analysis, it seems the index could fall a further 20 percent to test 2008 lows.

The Euro Stoxx 50 chart is dominated by trading bands created by well established support and resistance levels. The upper resistance level is near 3,050. It has acted as an effective cap since late 2009, trapping performance.

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  Tuesday, 6 Dec 2011 | 9:27 PM ET

ICBC Hong Kong Shares Could Rise 20%: Charts

Posted ByDaryl Guppy

Several weeks ago on CNBC Squawk Box we discussed the breaking news that Goldman Sachs had sold more of its stake in the Industrial and Commercial bank of China (ICBC).

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  Tuesday, 29 Nov 2011 | 6:57 PM ET

Shanghai Index Could Rally to 2,760 After Soft Landing: Charts

Posted ByDaryl Guppy

A weakening China economy is a further weight on global indexes. The current global fall may have been started by the euro zone collapse but many have looked for resilience in the China economy and China demand to help lift other economies. Some counties like Australia have built an entire economic recovery strategy based on assumptions about continued China growth.

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  Tuesday, 8 Nov 2011 | 6:44 PM ET

Dow to Reach Next Target of 12,600 in January: Charts

Posted ByDaryl Guppy

The head and shoulder pattern on the Dow achieved its exact target projections. This was followed by a period of L-shaped consolidation activity. The weekly close above 11,600 was clear evidence the L-shaped consolidation breakout was confirmed. The initial upside target for the breakout was near 12,300. This was calculated by using the projected value of the head and shoulder neckline.

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  Tuesday, 1 Nov 2011 | 8:14 PM ET

Charts Suggest a Further 20% Downside for Olympus

Posted ByDaryl Guppy

The free-fall in Olympus stock in recent weeks, roiled by a deepening scandal over massive M&A payments which came to light after the sudden axing of its CEO Michael Woodford, took the investment world by surprise. While details of the past deals remain murky, the outlook for its shares is clear, with further downside expected according to technicals.

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  Tuesday, 25 Oct 2011 | 1:47 AM ET

Apple in Strong, Stable Trend: Charts

Posted ByDaryl Guppy
Despite recent bad news, investors have been reluctant to sell out of Apple's stock, suggesting the stock is in a strong and well established trend. »Read more
  Tuesday, 18 Oct 2011 | 8:03 PM ET

Dollar Index to Retest Lows Near 72.50: Charts

Posted ByDaryl Guppy
There is a reasonable probability the U.S. dollar index will fall below 74.50 and retest the lower edge of the base of the symmetrical triangle pattern near 72.50. Traders will look for a consolidation pattern to develop between 72.50 and 74.50. »Read more
  Tuesday, 22 Nov 2011 | 6:57 PM ET

Downside Target for Euro-Dollar Is $1.29: Charts

Posted ByDaryl Guppy

Eurozone uncertainty and the potential implosion of the euro is reflected in the volatility of the euro-dollar chart. It’s useful to step back from the raging volatility of daily trading and look at the bigger picture using a weekly chart. This helps to put the daily price activity into a broader context. The picture may remain confused and chaotic but there is usually a broader perspective of the context of the daily price activity.

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  Tuesday, 15 Nov 2011 | 6:53 PM ET

Upside For Oil Capped at $110-$115: Charts

Posted ByDaryl Guppy

Viscosity is a measure of the stickiness of oil or put another way, a measure of the degree of slipperiness. The viscosity of the oil trend is determined by a combination of static and dynamic factors.

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About Charting Asia

  • Daryl Guppy is an independent technical analyst who appears frequently on CNBC Asia. He runs training, analysis and resource workshops for retail and professional financial market traders involved in stocks, CFDs, warrants, derivatives, futures and commodities in China, Malaysia, Singapore and Australia. He has his own trading company, guppytraders.com.

 

  • Daryl Guppy is an independent technical analyst who appears frequently on CNBC Asia.