Charts: Asia Dip Could Sink Global Stocks
The rising trend in Tokyo and Chinese stocks has broken and selling pressure is ahead for the two Asian indexes, Royce Tostrams, technical analyst at Tostrams Groep said Friday. And weakness in Asian markets could affect global stock markets, he warned.
The Nikkei 225 Average has failed to rise above the key resistance level of 11,000 and has therefore settled into a downward trend after rallying over 50 percent since March, Tostrams said.
"Do not enter this market yet. Stay on the sidelines," as there will be "more selling pressure ahead," he said on CNBC.
"This could affect other stock markets because in the past year Asian markets like Nikkei and Shanghai have been the leading markets over other stock markets," he added.
"The rising trend in Shanghai has also been broken," Tostrams told CNBC. He said he sees selling pressure ahead for the index, adding that it could fall to the September low of 2,639.759, next low would be 2,331.877, which are the April lows.
"This market is not interesting for the time being. There's more selling pressure ahead," he said. "So remain cautious."
The Shanghai Composite has gained over 170 percent since October last year, according to Tostrams.