Comprehensive Market Analysis: Asia Pacific Indices and Companies
Broker: CGS-CIMB
Date: January 6, 2025
Nikkei 225 Index: Striving for Breakthrough
The Nikkei 225 Index continues to oscillate within a range of 37,800 to 40,000. A promising breakthrough above 40,000 occurred on December 27, 2024, but was followed by a bearish reversal due to profit-taking before Japan’s long holiday. Short-term momentum indicates another attempt to surpass 40,000, although a pullback to test the 39,200 support level is likely beforehand.
If the index successfully rebounds at 39,200, it could target 41,300 in the near term. Technical indicators suggest a rangebound trend with slow momentum, while the MACD and Signal Line have flattened. Long-term sentiment remains cautiously optimistic.
Hang Seng Index: A Gloomy Short-Term Outlook with Long-Term Potential
The Hang Seng Index (HSI) experienced a bullish break on December 9, 2024, but failed to sustain momentum near the 20,230-20,600 resistance zone. A strong bearish rejection at 21,000 placed the index in a rangebound mode between 19,590 and 20,230.
Given the lack of momentum, the HSI is expected to test 18,400 within the next three months before rebounding. Despite the weak short-term outlook, long-term targets remain bullish at 26,179 and 30,257. Technical indicators, including a bearish MACD crossover and declining Stochastic Oscillator, confirm a negative mid-term sentiment.
Dow Jones Industrial Average: A Double Bottom Formation?
The Dow Jones rejected the critical 45,000 level but faced a stronger-than-anticipated correction, breaking below the 43,300-43,500 support range. The index found support twice at 42,300, indicating a potential minor double bottom. If the 43,400 neckline resistance is breached, the index could target 44,600 in the near term.
However, strong resistance at 44,600-45,000 could lead to a three-wave corrective structure targeting 41,000-41,700. While short- to mid-term indicators suggest bearish momentum, the long-term trend remains intact with a bullish target of 46,000.
CSI 300 Index: Bearish Correction in Progress
The CSI 300 Index confirmed a bearish descending triangle after breaking below the 3,800 support level. The index is now on course to test 3,700, with a potential drop to the lower support zone of 3,510-3,400.
Short-term indicators like the 23-period ROC and ADX suggest continued bearish momentum. However, the MACD indicates long-term bullish potential, with the index trending above Ichimoku’s Kumo. Long-term targets have been revised to 4,270.
MSCI Singapore Index: A Larger Corrective Action Underway
The MSCI Singapore Index is likely headed for a larger correction, potentially testing the 362.00-359.00 support region before rebounding. Long-term sentiment remains positive, with an upgraded target of 388.00.
Short-term indicators such as the ROC and Stochastic Oscillator point to a bearish correction, while the MACD and Ichimoku suggest waning momentum. Investors should expect a mixed outlook in the near term.
SET Index (Thailand): Bearish Sentiment Takes Hold
The SET Index invalidated its previous bullish sentiment after breaking below the 1,435 neckline support of a head-and-shoulders pattern. With a rebound at 1,372, the index faces continued bearish pressure. A further drop could test the 1,340-1,330 levels before any recovery.
Technical indicators, including a bearish MACD and declining Stochastic Oscillator, confirm the negative outlook. Long-term sentiment has shifted to cautious bearishness.
Jakarta Composite Index: Mixed Signals with Limited Upside
The Jakarta Composite Index failed to sustain its breakout above the 7,500 resistance level and corrected to 6,970 support. Near-term upside may continue to 7,400, but any gains are expected to be short-lived.
Technical indicators present a mixed outlook with short-term bullish divergence in the ROC but a bearish MACD crossover. Long-term trends remain bearish, with upside capped at 7,400.
Nasdaq Composite (IXIC): Strong Long-Term Momentum
The Nasdaq Composite showed resilience, closing the week on a positive note after five days of losses. The index remains firmly supported near its 50-day moving average and 100% Fibonacci extension level.
Technical indicators favor long-term upside, with IXIC expected to push towards 19,900 resistance. However, failure to break through could validate weakening momentum and test major support at 18,650.
Russell 2000 (RUT): Uptrend Strength Being Tested
The Russell 2000 found support after significant weakness from prior all-time highs. Despite the formation of a double top, the index closed the week positively and continues to form higher highs and higher lows.
Technical indicators signal long-term strength, but short-term downside risks remain. The index is expected to test initial resistance at 2,320, with support near 2,160.
