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From Sagar Chakraverty, Opalesque Asia:
A Global Markets Review issued on 22-Jan by MTS Research, a London-based investment research company specializing in technical analysis, predicts a continued drop in indices across the Asia Pacific markets.
Asian Pacific markets see weak corrections
As the equity market sentiments were too bullish, the stage is set for an imminent market correction. While equity markets globally are nearing short-term oversold levels, most Pacific markets have only recently completed the rally patterns which began in late 2008 or early 2009, so they are merely in the early stages of the largest correction for 9 to 15 months, according to the research firm.
Individual markets such as Singapore should correct at least another 5%, and quite a lot more amongst some of the higher-beta stocks, MTS said.
Although Hong Kong's Hang Seng dropped to 20722.08 on 3-Feb, a mere 4.1 points drop from 22-Jan level, and it looks the least vulnerable compared to other Asian markets, MTS said that it would be better if the bullish signals stayed a little more, indicating a potential for new rally highs.
The Hong Kong market is short-term oversold again (which is a situation where the price of an asset has fallen to such a degree - usually on high volume - as to become undervalued), and all of the breadth indicators currently contain bullish divergence signals. This kind of divergence occurs when rising price highs in an uptren...................... To view our full article Click here
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