Nikkei, Hang Seng and Dow Jones update -- 29th Jan 2023

It has been a while since my last up-date. It is not that I am getting lazy. 

I was quite busy with my son's course selection process after the release of his 'O' level result. My son's decision on his direction has been somewhat changing regularly and it needs quite an effort to finalize his choice of course. 

Most importantly, it is important to align his interest with his core strength. If your choice is based on your interest while not your core strength, or vise versa, your success rate of achieving your goal is 1/2. If neither, it is going to be a nightmare.

During my time, many people have no idea what they wanted, and they chose because their friends were there, or it was their only option because of their bad result. Most ended with jobs they dislike but were forced to continue for the money. whenever I drive on the streets I watch and observe the pedestrians crossing the roads. I feel that the life got sucked out of them and they are just going through the motion...for the money.

I do not want that to happen to my children, I will have to at least do my part to make sure they make the right choice. 

For every choice my son has made, I challenged him while he justified his stand. It was only when he did not sway fom his choice that I am certain that was what he wanted. It was not an easy process and there were quite a lot of frustration. In the end, he chose to head for Polytechnic, and he picked Civil Engineering. 

After that, I let him talk to my cousin who is a Civil Engineer by training and with experience in the field. It helped to strengthen his belief in making the right choice.

Meanwhile,I was still checking on the charts. The only issue is that I did not know what to update. Most of the counters were still in progress. Came last 2 weeks was Chinese New Year and I travelled back to Kuala Lumpur to visit my parents. This was when I stopped looking at the charts.

After at least 2 weeks of pause, I told myself today, " I must create some entries, or I will be stopping again."

So here goes.

Fig 1 Nikkei 225 weekly chart

Nikkei might be the one with the most surprises to me. In my last update in A plunge in Nikkei 225 this week, I estimated Nikkei would continue go down with pull back onto the moving average it crossed. 

It did a pull back as I expected. It began 2 weeks ago with a gapped down only to closed above the 144-week moving average by the end of the week. This also created an engulf pattern indicating reversal.  It further gapped up and closed above the moving averages by the end of this week. This gives confirmation to the pattern.

We shall see more uptrend in the coming week. Where are the resistance then?

Drawing trendlines using the peaks, I am seeing 28,529, which coincidentally the envelop of the Bollinger band. In addition, with the most recent 2 peaks, the more immediate resistance will be 27,994.

Additional point to note, the down trend is gradual as compared to the uptrend. I am still with impression of an eventual uptrend. The only issue is that I am still with impression that this down trend is yet to end. 

Probably its decision at the trendline resistance will give me more clue.  

Fig 2. Hang Seng weekly chart

In my last update in Slacking on the new year, I expected more uptrend from Hang Seng, it did with a run-away gap. 

It is now getting close to the 50% retracement, coincidentally close to the 144-week moving average at 23,007.

In addition, there are also other indication of possible trend reversal, including its break-out from the down trend trendline. It is also further supported with a golden cross between 8 and 55-week moving averages.

My original expectation was that Hang Seng may be in a correction phase. It seems that at this point, it may be on an uptrend at this point of time.

Fig3. Dow Jones weekly chart

It is trickier with Dow Jones. While crossing back above the moving averages, it continued to congest and even retested the 21-week moving average. There is still uncertainty as to where it will go.

For the time being, there is still a chance that Dow Jones may go lower by still strongly supported by the moving averages. In the long run, there are at least 2 indications that Dow will climb further. Its gradient of ascension is steep while the present pattern is more gradual.

For the time being, the more immediate resistance I see is the Bollinger envelop of 36,757.

Slacking on the new year

 I have to admit, I have been slacking at the turn of a new year. I have skipped my entry for lat weekend as I was quite lazy to move, even if it was my fingers.

During the last week of the year, my wife decided to clear her leaves and we went on a short travel to Johore Bahru after my return from Kuala Lumpur. 

At the same time, I have to plan activities for my son during his wait for exam result which is due this coming Thursday. We went for open houses in various Polytechnic so that he has some idea what his options are. Nevertheless, my advice to himis to go for Junior College as long as it is a possibility. It is still the shortest and with highest chance to reach University level, of which with more options than polytechnics.

At the same time, whenever I look at the charts, I did not feel like doing anything as they are more or less in congestion and uncertainties. Nikkei for instance is still in progress of the direction I have estimated in A plunge in Nikkei 225 this week.

In addition, the market seems to be lacking in motivation to go anywhere. I remember my master mentioned the possibility surge due to the festive joy at the end of the year. It does not seem to be happening. Instead, they all look moody, it quenches my motivation to check on charts. 

Anyway, I will work on Dow Jones and Hang Seng this week, since Nikkei was done 2 weeks ago. Last p-date for Dow Jones and Hang Seng was After a week's break....., dated 11th December 2022. It is worth while doing one this week.

Fig 1. Dow Jones weekly chart

In my last up-date on this counter, I estimated that it will correct only to be supported by the moving averages before continuation. Well, it corrected and is now at the moving averages, what next?

My concern at this moment is the way it is developing after hitting the moving averages. It did not bounce up and congested. At the same time, it stayed above the moving averages, especially supported by 55-week moving average.

One possibility is a continuation downward, but the down slide may be with little or no momentum. There are multiple moving averages of 89 and 144-week to damp the momentum of the fall.

The support level I see for this move is 31571 to 32,388. the possibility of reversing up-ward so far is high.

The other possibility is the present support able to push Dow Jones higher. We should then see further up-thrust to 35,711 to 37,651. 

Fig 2. Hang Seng weekly chart

Mty last up-date on Hang Seng indicated a continuation up-thrust. Well, it went up as predicted, breifly congested till the 8-week moving average caught up, only to climb further. Moreover, it crosses the 55-week moving average resistance and stayed above.

At present it is only resisted by the 38.2% retracement resistance. My feel is that it may enter another congestion hovering between 55-week moving average and the 38.2% retracement line. However, I still think that it is going to head further up eventually, it has yet to reach its 100% projection resistance at 21,978.

On a side note, the gradient of its climb is steep, I believe that the up-trend may continue for some time. Having said that, it will need a counter wave correction before the last surge.