Technical Analysis: Asia Major Index – Bearish risk remains April 27, 2020 985

  • On 13th March 2020, we highlight that Asian major indices will continue to have a sell-off before a rebound.
  • Major Asia index has begun to see the light at the end of the tunnel but bullish momentum remains weak.
  • Based on wave analysis, all major Asia index will see a continued sell-off after April.


Nikkei 225 index has been in a corrective flat since the start of 2018 with a high potential of the index forming a regular flat corrective wave. Based on the wave analysis, there seems to be a slight rebound and Nikkei 225 will most likely retest the resistance level 1 back at 20,153.73 region before a sell-off to 15,746-15,010 to complete wave C.

The resistance level of 21,000 must not be invalidated.


Hang Seng wave analysis suggests that the index has completed the 5-wave primary phase from 2016 January to mid-2017. From there, the index has entered into a prolong zig-zag corrective wave which sees the index completing its (iii) sub-wave. The (iv) wave is completed given the fact that the evening star formation has rejected the resistance level of 24,540.63.

Moreover, the downward channel is entrenched for 2 years and prices will need a third touch to cement the rally forward. Potential wave (v) should be terminating at 21,166.02-20,302.30.


The Daily chart shows a clearer picture of the index’s price movement and as price broke out of the rising wedge’s lower base, the start of the new downtrend is here unless 24,500 psychological level is taken out. The immediate price target is at 21,166.02-20,302.30. which confluence with the weekly chart wave (C) level.


The monthly chart wave count shows a complex zig-zag wave with the B wave ended as a complex correction with triangles in it. Throughout the monthly wave analysis, STI displays a weakness on its upside as it is still on a corrective phase for the last 10 years after the Financial crisis.


Fast forward to today, wave analysis suggests that there is further downside after price broke down its multi-year support at 2528, setting the foundation for sub-wave (iii). Although there is a brief test on the multi-year support turned resistance level, prices nonetheless remain close below the resistance level, signalling a continuation of the ((v)) wave.


The weekly chart exhibits a clearer downside move ahead. First, the rebound was capped at 38.2% of the Fibonacci retracement level with an evening star formation and the downside will take out 2100 level and once this level is broken, the next immediate target will be at 1902.33.

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