Nikkei, Kospi, and Hang Seng Forecasts – Asian Markets Limp into the Weekend

Nikkei 225 Technical Analysis

The Nikkei 225 is very quiet during trading on Friday as we are just chopping around in the middle of a range. This is a market that has been looking for some type of recovery, but keep in mind that Japan is particularly vulnerable at the moment due to the fact that they import 100% of its oil, and that could cause some issues.

The 200-day EMA sits at the 50,382-yen level, and I think that at the moment, it is your floor. Short-term pullbacks I do think get bought into because we are seeing some type of basing pattern. If we can get above the 55,000-yen level, I think that is a signal that we may go looking towards the recent highs.

KOSPI Technical Analysis

The KOSPI in South Korea has cooled off significantly over the last several weeks, and again, part of it is a fuel problem, as the Strait of Hormuz is really starting to affect Asian economies here over the next couple of weeks, as physical delivery of crude oil will cease.

The 50-day EMA is currently holding the market up. It is probably worth knowing that it did gap higher and we are up about 2.7%, but we are in the middle of that engulfing candlestick from the previous session. I think after the gap and not doing anything, maybe it’s a sign that although it was a little bit of a pop to the upside, now we are just waiting around to figure out what to do next.

Hang Seng Technical Analysis

The Hang Seng in Hong Kong has dropped a bit, but it is in the middle of a consolidation range, which I think is going to turn into a bottoming pattern. The 25,000 level is an area that a lot of people will be watching in the middle of that range. If we can turn around and break above the 200-day EMA, then the market could very well go to the 26,250 level.

Again, this is a situation where it does not have so much to do with the domestic economy in Hong Kong or the Chinese economy; it has to do with crude oil and the situation in the Middle East. That is what is on everybody’s minds. So, good news in the Middle East, Hang Seng rises. Bad news in the Middle East, Hang Seng probably drops.

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