Shanghai Indicates a Rebound Coming Soon: Charts
The Shanghai Composite, often a leading indicator in global markets' direction, is due for a consolidation, followed by a rebound, Daryl Guppy, CEO of Guppytraders.com, told CNBC on Thursday.
"The key fact for the Shanghai Composite is that we're developing a rebound," Guppy said. "This is important not just for regional markets, but for global markets as well."
Guppy said he is looking for the Chinese index to consolidate around 2,500 "and then a break out above 2,680 with upside targets around 3,000."
The CAC-40 index created a "double top" around 4,100, according to Guppy.
He sees the French index consolidating to around 3,300, "perhaps slightly lower," from where it could potentially rebound.
"But the double top around 4,100 limits the upside," he warned.
South Korea's KOSPI index "is stuck in a trading range between 1,530 and 1,700," Guppy said.
If the KOSPI breaks above 1,700, it could continue rising to around 1,900, he predicted.
But a move below 1,530 would give a "downside support target between 1,370 and 1,470," he added.
The KOSPI gives leadership for regional Asian markets, according to Guppy.
In the Dollar Index, Guppy said he is "looking at about a maximum of two more weeks for a continuation of the current trend up towards 89, maybe 90, if we are going to continue the extreme momentum."
Once the index hits 89 or 90, "we can expect a sudden correction developing with a plummet back down towards the 82 level," he told CNBC.
Guppy's initial target for gold is $1,250 an ounce.
"But a move beyond that gives us a target of around $1,275 and a longer target of $1,340," he said.
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