Comprehensive Analysis of APAC and Global Indices

Broker: CGS-CIMB | Date: February 10, 2025

Nikkei 225 Index: Tight Consolidation with Bullish Hints

The Nikkei 225 continues its retreat, as expected, with a gap down, currently testing the lower support boundary at 38,100. The mid-term outlook remains rangebound, with the range tightening to 38,100-40,000. Selling pressure at the 40,000 level has eased, weakening the resistance due to multiple tests. However, should the support at 38,100-37,000 hold, the index may edge towards a breakout. A bull trap near 41,000 is a possible scenario if the resistance is breached.

Key Technical Insights:

• The 23-period Rate of Change (ROC) rebounded above the zero line, though momentum displayed a downward slope.
• Stochastic Oscillator confirms an overbought crossover, declining below the 80-level.
• The 14-period Average Directional Index (ADX) highlights a trendless situation.
• MACD/Signal lines declined and flattened.

The report emphasizes that the 40,000 resistance is likely to break eventually, but caution is advised due to potential bull traps.

Hang Seng Index: Bullish Momentum Gaining Strength

The Hang Seng Index successfully broke above the key resistance of 20,600 and is nearing the target of 21,200. The price action indicates a bullish trajectory, targeting the 21,930-22,000 range in the short to mid-term. Momentum indicators suggest continued strength, though longer-term confirmation of a renewed upside is still awaited.

Key Technical Insights:

• Long-term MACD crossed above the zero line, with a positive histogram.
• Stochastic Oscillator rebounded from the oversold zone, indicating bullish momentum.
• The 23-period ROC rose above the zero line.
• The 14-period ADX indicates early bullish strength.
• Ichimoku signals show two out of three bullish crossovers.

The upside target remains at 22,000, contingent on further confirmation of long-term momentum.

CSI 300 Index: Bearish Mid-Term Outlook

The CSI 300 Index continues its rebound from the 3,700 level, with a near-term target of 3,960. However, mid-term price action remains bearish, with 4,000 posing a psychological resistance. A potential extended 3-wave corrective structure is anticipated, with strong support at 3,510.

Key Technical Insights:

• The 23-period ROC remains below the zero line, displaying weak momentum.
• The 14-period ADX indicates a trendless situation.
• MACD signals bearish momentum.
• Ichimoku trend signals are sluggish and rangebound.
• Stochastic Oscillator suggests a potential oversold crossover.

Long-term targets are set at 4,270, but the short-lived upside is likely to face resistance at 4,000.

MSCI Singapore Index: Consolidation with Long-Term Upside

The MSCI Singapore Index formed a small consolidation pattern, sustaining above the key support of 384.00. Momentum and price action suggest a near-term target of 400.00, with a major long-term target of 409.00.

Key Technical Insights:

• The 23-period ROC broke above the zero line.
• Stochastic Oscillator showed an overbought crossover with weak bearish pressure.
• The 14-period ADX rose in tandem with the positive DM+.
• Ichimoku signals indicate a strong return to the upside.

A long-term positive outlook is maintained as price action and momentum confirm the upward trend.

SET Index (Thailand): Short-Lived Rebound

The SET Index rebounded at the key support zone of 1,278-1,300 but faces strong resistance at 1,330. Despite the rebound, the index remains in a bearish phase, likely ranging between 1,247-1,330 in the near term.

Key Technical Insights:

• The 23-period ROC retreated below the zero line.
• The 14-period ADX rises alongside bearish DM-.
• Stochastic Oscillator’s oversold crossover failed, heading lower.
• MACD remains bearish.
• Ichimoku shows three bearish death crosses.

The mid-term bearish correction persists, emphasizing caution for investors.

Jakarta Composite Index: Persistent Bearish Pressure

The Jakarta Composite Index broke below the key support level of 6,800, heading directly to 6,660. A short-term rebound is possible, but resistance at 6,820 or 6,940 is likely to reject further gains.

Key Technical Insights:

• The 23-period ROC declined below the zero line, invalidating bullish divergence.
• The 14-period ADX shows bearish strength but hints at slight corrective upside.
• Stochastic Oscillator forms an oversold crossover, but momentum remains neutral.
• MACD signals a potential long-term downtrend.
• The index continues to trend below the kumo cloud.

A bearish outlook is maintained as 6,800 has been breached.

Dow Jones Industrial Average: 3-Wave Correction Likely

The Dow Jones rebounded at the 43,900 support level but faced strong resistance at 45,000. A double top formation suggests a potential 3-wave correction, targeting major support at 43,400. A break below this level could extend the corrective wave to 42,900.

Key Technical Insights:

• Directional Movement Index sustains bullish strength above the 25.00 level.
• The 23-period ROC rose sharply above the zero line, flagging bearish divergence.
• Stochastic Oscillator supports bullish strength above the 50-mid-point level.
• MACD histogram turned positive.
• Ichimoku shows three bullish golden crosses.

While the long-term bullish trend remains intact with a target of 46,000, caution is advised for short-term corrections.

S&P 500 Index: Volatility Amid Long-Term Upside

The S&P 500 Index started the week with downside momentum but found support at the 50-day moving average. The rally over the week flagged weakening momentum, suggesting a potential retest of the support level.

Key Technical Insights:

• RSI forms lower highs, indicating weak momentum.
• The McClellan Oscillator ends the week slightly bearish below 0.00.
• Breadth and momentum show signs of short-term weakening.

Investors are advised to monitor support at the 50-day moving average ahead of key economic data.

Nasdaq Composite: Descending Triangle Formation

The Nasdaq Composite exhibited weakness, pushing below its 50-day moving average. A potential descending triangle formation suggests short-term downside, with support at 19,200 and 19,000 as key levels to watch.

Key Technical Insights:

• RSI continues to form lower highs, flagging weak momentum.
• The descending triangle signals short-term downside risks.

Investors should closely monitor support levels to anticipate further market movements.

Russell 2000: Consolidation Holds Key

The Russell 2000 (RUT) held support at 2,260 but failed to break resistance at its 50-day moving average. The index remains in a consolidative phase, setting up for a potential breakout in either direction.

Key Technical Insights:

• RSI consolidates around the 50.00 level.
• A breakout from the current consolidation will determine the short-term trend direction.

The long-term outlook remains positive above the 200-day moving average.