Japan/Hong Kong/India Triangle Breakdown

Failure /Double Bottom??A Technical Review.

Technical Analysis is an art which is based on the similarities/repetitions of market
movements from historical patterns/psychological behaviors of a market that is
traded by a large no of entities. History repeats itself and so do we see lot many
patterns which are observed for the last so many years and still continue to be in
place with similar results.
In the current study we are looking at three major Asian indices namely Hang Seng
(Hong Kong), Nikkei (Japan), Sensex (India). We have noticed quite a lot of
similarities in the technical structures of the three charts on monthly/daily basis.
First we will list down the points of similarities in the above indices. Then we would
look into charts which have symbols/explanatory boxes to depict the same.
Monthly Index Charts:
1) The bottoms in October have been close to the channel supports. The
channel has almost 4-5 bottoms till now so is a strong base zone and has
been since the 1980s.
2) The panic lows were made in October and the next testing of lows was in
March.
3) The re-test in March did not break the lows but came very close to it and also
near to the supporting channel.
4) There was a good spurt of 20% or more from the March bottom levels and in
quick time compared to the down move after triangle breakdown confirming
the triangle pattern failure.
Daily Index Charts:
1) After the panic lows in October the indices we see a triangle formation and a
wide range.
2) The triangle breakdown was confirmed which ideally pointed towards a newer
low in the first quarter of the year.
3) The low made was higher or closer to the October bottom making it a
classical failure of triangle breakdown or double bottom.
4) The indices are back towards the horizontal range as well as sloping trend
line of the downtrend.

5) A closing move above the range would change the trend significantly on the
upside and give a scope of 20% or more equivalent to the sideways range.

Monthly Charts Japan/Hong Kong India

Nikkei ( Japan )

1) The bottoms in October have been close to the channel supports joining
bottoms of 1984/2003. The upper side channel also shows the topping out for
the index.
2) Low of 6994 in October 08 was re-tested in March 09 but it was almost equal
to the previous one.
3) Classical Double bottom as lows of 6994/7021.
4) The index has bounced back around 28% from the lows very quickly
compared to the down move after triangle breakdown confirming the triangle
pattern failure and is now close to tops after October.

Hang Seng (Hong Kong)

1) The bottoms in October have been close to the channel supports joining
bottoms of 1989/1998/2003. The upper side channel shows how we saw a
huge move out of the channel and a similar huge down-move once it got
back into the channel.
2) Low of 10676 in October 08 was re-tested in March 09 where it touched
11344 which was a little higher.
3) The low of March was near the November lows but the triangle breakdown did
not lead to a new low this time.
4) The index has bounced back around 33% from the lows very quickly
compared to the down move after triangle breakdown confirming the triangle
pattern failure and is now close to tops after October.

Sensex (India)

1) The bottoms in October have been close to the channel supports joining tops
of 1992/2001.Sensex is now testing the channel from which it broke out
around 7k-8k in 2005 leading to the bull run.
2) Low of 7697 in October 08 was re-tested in March 09 where it touched 8047
which was a little higher.
3) The low of March was near the November lows but the triangle breakdown did
not lead to a new low this time.
4) The index has bounced back around 32% from the lows very quickly
compared to the down move after triangle breakdown confirming the triangle
pattern failure and is now close to tops after October.

Daily Charts Japan/Hong Kong India

Nikkei ( Japan )

Hang Seng (Hong Kong)

Sensex (India)

 The charts shown above clearly depict the similarity in terms of the triangle
and horizontal range. Breakout move above this range gives a scope of a 20
% upside or more equivalent to the horizontal range in the particular indices.
The last major down leg started around 7 Jan and lasted till March 9.This is
roughly around 40 sessions or 2 months.
If the indices discussed are able to cross the highs around 7 January in a time
frame of less than 40 sessions or 2 months from March 9 would give an
indication of the bear power reduction.
So we would review the situation around May 2 nd week which coincides with
the above time-frame. The current move has been quick with many gap ups
and for the bullish scenario to be strong it would be better if the indices see a
retracement to the extent of 38/50% of the rally since March lows giving a
buying opportunity as well as a breather to the overrun indices.
A move below 61.8 % of the current rally may create doubts over the
possibility of the breakout on the upside. For more updates on the extreme
short term movements check the website/blog for daily views on Sensex and
stock specific developments.
The current pattern on the downside consolidation looks exactly opposite to
what happened in the topping out of FTSE ( UK ),CAC( France) ,DAX

( Germany) and Dow Jones ( USA ). If possible would put out a report on the
same in the coming weekend.

The above view is a pure technical view and would be happy to receive
comments/criticisms/suggestions and more from the readers.

Best Regards,
Nooresh
noorrock2002@gmail.com
meraninooresh@yahoo.com
09819225396

DISCLAIMER
"I do not make any warranties, express or implied, as to results to be
obtained from using the information in this report. Investors should obtain
individual financial advice based on their own before making any
investment decisions.