KOSPI, NIKKEI 225 and NIFTY 50 Forecasts – Asian Indices Showing Pressure on Wednesday

KOSPI Technical Analysis

The KOSPI in South Korea initially did jump a bit during the trading session to reach the 5,750 level before pulling back. That being said, despite the fact that it pulled back, it did close higher by 1.4%, so it is starting to show more resiliency as it had been one of the bigger performers out there for quite some time.

The 50-day EMA sits at the 5,163 level and is rising and, of course, we have the 5,500 level between here and there that could also offer support. Ultimately, I think this is an index that is trying to reach the highs yet again, but the situation around the world with war and energy shocks has been a bit of an issue for South Korea, just as it’s been for most other places.

NIKKEI 225 Technical Analysis

The Nikkei 225 looks very much like an index that has reached the top of a trading range. That being said, I do think this is a situation where we may continue to see a little bit of back and forth here. I think the Nikkei is probably okay until it breaks below the 51,750 level.

At that point, then we start to threaten the 200-day EMA, which should and needs to hold. If it doesn’t, that changes everything. On the other hand, if we turn around and break above the 55,800-yen level, maybe the 56,000-yen level, somewhere in that area, it could open up a bigger move towards the highs again.

Ultimately, this is a market that has performed quite well for some time. This pullback so far has been healthy. I do think there are buyers underneath and will be looking for some type of bounce so I can get on the right-hand side of the V.

NIFTY 50 Technical Analysis

The Nifty 50 in India looks pretty bad, actually. There’s a major problem facing India in the form of energy being constricted, which, of course, will have a major outsized influence on Asian countries overall, as the Straits of Hormuz have been a major sticking point.

So, with the oil shock, I think that’s one of your big problems, but there’s been institutional flight from India recently as the market is trying to be held up by domestic institutional investors trying to cushion the fall with aggressive buying, but they’re not able to offset the external pressures and sales.

Unlike New York, India only has a limited domestic institutional group of traders involved, so this looks a lot like a market that probably continues to drop. The Indian rupee just hit a fresh record low as well, so that gives you the concern about imported inflation. I think the Nifty 50 could be in serious trouble for a while. Rallies at this point in time that show signs of exhaustion are probably to be sold into.

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