the week ahead for major asian stock indices 24 oct to 28 oct on a firm footing for further potentia

Nikkei 225 – Poised for a potential bullish breakout

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 17020

Pivot (key support): 16700

Resistances: 17500 & 18000

Next support: 15830

Medium-term (1 to 3 weeks) Outlook

The Japan 225 Index (proxy for the Nikkei 225 futures) has continued to inch higher as expected and met our first medium-term upside target resistance at 17165. Please click here for a recap on our previous weekly outlook.

Upside momentum remains intact as the weekly RSI oscillator continues to inch higher above its support and the 50% level. Therefore, the Index may now stage a bullish breakout from the significant resistance of 17500 (descending trendline from 21 June 2015 & range top in place since 24 January 2016) to target the next resistance at 18000 in the first step.

However, failure to hold above the tightened medium-term pivotal support at 16700 is likely to invalidate the preferred bullish bias for a deeper decline towards the next support at 15830 (former medium-term swing high areas of 30 June/04 July 2016 & close to the 61.8% Fibonacci retracement of the up move from 24 June 2016 low to 02 September 2016 high).

Hang Seng Index – 23550 resistance remains the potential upside trigger

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Pivot (key support): 23000

Resistances: 23550 (upside trigger), 24500 & 25400

Next support: 21650/380

Medium-term (1 to 3 weeks) Outlook

The Hong Kong 50 Index (proxy for Hang Seng Index futures) has managed to hold above the 23000 medium-term pivotal support and inched higher towards the 23550 upside trigger level.

No major changes in technical elements and 23550 needs to be surpassed to open up scope for a potential upleg to target the next resistances at 24500 follow by 25400.

On the other hand, a break below the 23000 medium-term pivotal support is likely to see a deeper slide towards the next support at 21650/380 (the pull-back support zone of the former “symmetrical triangle range” bullish breakout, 61.8% Fibonacci retracement of the up move from 24 June 2016 low to 09 September 2016 high & the ascending trendline in place since 11 February 2016 low).

ASX 200 – Downside target at 5360 almost met, potential start of a new upleg

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 5415

Pivot (key support): 5380

Resistances: 5500/5520 & 5580

Next support: 5320/300

Medium-term (1 to 3 weeks) Outlook

The Australia 200 Index (proxy for the ASX 200 futures) has declined as expected and almost hit the expected downside target/support at 5360 (printed a low of 5379 on 18 Oct). Please click here for a recap on our previous weekly outlook.

Current technical elements are now suggesting that the corrective wave 2/decline is likely to have ended at the 5379 low on 18 October 2016 and a medium-term up move is in progress. As long as the 5380 medium-term pivotal support holds, the Index is likely to shape a potential up move to retest the 5500/5520 intermediate resistance and a break above it may see a further rally to target the 5580 medium-term swing high area of 01 August 2016.

However, failure to hold above the 5380 medium-term pivotal support is likely to see a U-turn for an extension of the corrective decline towards the next support at 5320/300 (61.8% Fibonacci retracement of the up move from 14 September 2016 low to 04 October 2016 high & the lower boundary of the medium-term ascending channel in place since 11 February 2016 low).

Charts are from City Index Advantage TraderPro as at Thurs, 20 Oct 2016

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