Nikkei 225, Hang Seng 50, and ASX 200 Forecasts – Asian Indices Pushing Forward on Peace Hopes

Nikkei 225 Technical Analysis

The Nikkei 225 has just shot straight up in the air on Monday in reaction to the potential for some type of peace coming out of the Middle East. This is a little bit of a conundrum because quite frankly, we’ve heard the story before, but one of the reasons I think I’m okay with this type of move is just simply that it’s a continuation of what we had seen previously anyway.

So, I think short-term pullbacks are buying opportunities, especially near the 64,000-yen level, that’s assuming we even get there. I suppose if you were to position size, accordingly, just jumping in and buying the breakout works as well, you just have to make sure that pullbacks don’t shake you out or hurt you too much.

Hang Seng 50 Technical Analysis

The Hang Seng in Hong Kong continues to be lackluster. Part of this is directly due to the effect of the Federal Reserve on Hong Kong. They essentially copy their monetary policy from the Fed, so it keeps the interest rates higher than it would otherwise be in Asia.

That being said, if we can break above the 50-day EMA, which would take a little bit of a Herculean effort, you could make an argument that we are bullish. I think as things stand right now, the Hang Seng has to be looked at through the prism of a very sideways market, trying to find its floor, trying to find a reason to break out.

ASX 200 Technical Analysis

The ASX 200 is very interesting to me because right now it is on the precipice of breaking out, and I think this could be the next one to rally, mainly due to the fact that commodities continue to be strong, and even if we get a little bit of a peace dividend, if you will, that shouldn’t bring down the value of commodities too much.

In fact, I suspect it will probably do the opposite because we will almost certainly go from worrying about whether or not commodities can get here to the fact that a lot of hard assets are well undersupplied and they will be for a while. The ASX 200, of course, is full of financials and major players in the commodity space. I am bullish.