HANG SENG, KOSPI, TOPIX – Worth Motion:

• The Grasp Seng Index, Kospi, and Topix have maintained a weak bias.
• Asian indices are at key help forward of the US Fed curiosity fee determination.
• What’s the outlook and the important thing ranges to look at?

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Grasp Seng Index: Downward momentum is rising

The sequence of lower-highs-lower-lows since early 2023 is an indication that the Grasp Seng Index’s pattern stays down. The index is now trying to fall beneath important help on the decrease fringe of a declining channel since early 2023. A decisive break beneath might pave the way in which towards the 2022 low of 14600. Whereas oversold circumstances and a string of coverage measures have at greatest led to minor pauses throughout the downtrend up to now. For extra dialogue see, “This fall Commerce Alternative: HK/China Equities Could possibly be Due for a Rebound,” printed October 9.

Grasp Seng Index Weekly Chart

Chart Created Utilizing TradingView

At a minimal, the Grasp Seng Index must cross above the mid-October excessive of 18300 for the downward stress to start fading. For a sustained rebound, the index would want to cross a number of hurdles, together with the higher fringe of the channel, close to the August excessive of 20350.

Kospi: Approaches an important ground

Kospi’s break in August has truncated the nine-month-long restoration. This follows a failure in mid-2023 to cross above a significant hurdle on the January low of 2590. Kospi’s fall this week to the bottom degree since January means the goal of the double prime sample (the June and August highs) of round 2380 has been achieved.

Kospi Weekly Chart

Chart Created Utilizing TradingView

Ashighlighted within the earlier replace, whereas there isn’t any doubt that the bullish stress has dissipated, Kospi would want to fall beneath the 2022 low of 2135, barely above the 200-month transferring common (now at about 2085) for draw back dangers to intensify. The final time the index was decisively beneath the long-term transferring common was in 2003.

Topix: Holds above sturdy cushion

Topix is holding above key help on a horizontal trendline from mid-2023 (at about 2200). Ashighlighted within the earlier replace, this cushion is robust and may not be damaged simply. Nevertheless, any break beneath would disrupt the higher-highs-higher-lows sequence prevailing in latest months, suggesting a short lived easing within the upward stress. Any break beneath 2200 might open the door towards the 200-day transferring common (now at about 2150).

Topix Day by day Chart

Chart Created Utilizing TradingView

Zooming out, from a big-picture perspective, the index has proven gradual indicators of energy lately, with the break above a horizontal trendline from the mid-Nineties turning out to be unambiguously bullish. Except the index falls beneath the resistance-turned-support on the 2021 excessive of 2120, the broader bullish image stays intact.

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— Written by Manish Jaradi, Strategist for DailyFX.com

— Contact and comply with Jaradi on Twitter: @JaradiManish