GLOBAL EQUITY MARKETS – January 22, 2022

REVIEW

---

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) is in an uptrend. The ETF found resistance at the minor high at 107.5. Friday’s price action breached the 200-day average but still remains above the horizontal support at 99 levels. Breakdown below 99 will change my positive view on this ETF. I will monitor ACWI ETF in the following week to see if price will quickly recover above the 200-day average and remain in trading range between 99 and 107.5. Note; price is resting above the upper boundary of the trend channel on weekly scale price chart. Breakdown can result in a lager scale correction.

---

Note: We have received many requests for the possibility to have the report in PDF format. Going forward I will attach a PDF version of the report for our members who would like to read on paper and also offline. Due to large size (given that I like to keep charts in large format) this is the best layout I could put the report. I hope this will be useful.

 

GLOBAL EQUITY MARKETS – JANUARY 22, 2022 – PART I

GLOBAL EQUITY MARKETS – JANUARY 22, 2022 – PART II

---

TECH CHARTS WATCHLIST – SUMMARY OF RICS & PATTERNS IN FOCUS

---

The benchmark for the Emerging Markets performance, the iShares MSCI Emerging Markets Index ETF (EEM) is trading below the 200-day average. The ETF has been recording lower lows and lower highs confirming the downtrend in Emerging Markets. The ETF rebounded from the lower boundary of the downward sloping channel. Strong resistance area remains between 50.8 and 51.7. The longer price remains below the 200-day average, the higher the chances of an established downtrend. There is no bottom reversal chart pattern on daily scale. Breakout above resistance area between 50.8 and 51.7 can reverse the past one year’s downtrend.

The benchmark for the Frontier equity markets performance, the iShares MSCI Frontier 100 ETF, experienced its first setback at the strong resistance at 36.2 levels. This week’s price action is possibly completing the right shoulder of the H&S top. The 200-day (40 week) average is forming support at 33.3 levels. Support area remains between 33.3 and 33.5 levels. I’m weighing the possibility of a H&S top with the right shoulder in progress. Breakdown below support at 33.3 levels can target 31 levels. Frontier Markets ETF is one of the last (between ACWI, EEM and FM) that is still holding above its year-long average.

Sharp sell-off pulled both indices towards their 200-day averages. Breakdown below 15,700 on Nasdaq confirmed the recent correction and breakdown below 4,600 levels on S&P 500 targeted the long-term average at 4,395 levels. 14,450 levels on Nasdaq can act as short-term support. I will monitor this index to see if it will be able to recover above the 200-day average at 14,960 levels. Nasdaq can form a multi-month long H&S top with the possibility of right shoulder forming in the coming months (BIG IF). A rebound on S&P 500 Index can target 4,600 levels.

Following the failed breakout above 2,360 levels, Russell 2000 Index tested the lower boundary of its multi-month long consolidation at 2,100 levels. Small Caps broke down support at 2,100 levels. Possible price target stands at 1,865 levels. Though in a larger scale correction this can be a conservative price target. Russell 2000 can target much lower levels. During any rebound 2,100-2,200 range will act as resistance.

Euro Stoxx 50 Index is in a trading range between 4,110 and 4,410 levels. As long as price remains above the 200-day average, I will treat this as a steady uptrend. On the weekly scale price chart we see a “doji” for the second time around the same resistance levels. This might suggest short term pause after the recent rally.

I’ve updated the chart study on Euro Stoxx Banking Index. Price remains above the year-long average which is forming support at 96 levels. This week the index reversed from strong resistance area between 104 and 111 levels. Uptrend is intact but reached to possibly a minor swing high.

Germany’s Midcap equity benchmark reversed from its previous high at 36.4K. As price tested the lower boundary at 33.2K, I started looking at two options; possibility to rebound and form a rectangle consolidation or possibility to breakdown and complete a double top with price objective of 30.4K. It is important to note that the 200-day average and the lower boundary are overlapping around the same level. I call these type of support areas as inflection points.

Japan’s NIKKEI 225 Index is possibly forming a multi-month long rectangle and can trade between 27K and 30.7K. Breakdown below the 200-day average resulted in a test of the lower boundary at 27K levels. The index is offering trading opportunity between well-defined boundaries. Last 4 months price action can be identified as a symmetrical triangle inside a long-term rectangle. Breakdown below 27K can target 23.7K with rectangle acting as a top reversal.

China SSE 50 Index experienced a rebound from the support at 3,050 levels. The rebound on the weekly scale met the 200-day average at 3,315 levels. I will monitor Chinese equities to see if the benchmark will be able to settle above the 200-day average. Last 3 months upward channel can act as a bearish continuation if the index fails to recover above the 200-day average at 3,315 levels. With index remaining below the 200-day average, probability of testing the minor low at 3,050 is high.

Turkey’s BIST 100 equity benchmark cleared the resistance at 1,600 levels on weekly scale. Breakout above a rising trend channel (monthly scale) is usually followed by a runaway price action (strong rally). The monthly close for November and December were above the upper boundary of the trend channel. The upper boundary of the monthly scale price chart is at 1,740 levels that is expected to be support during pullbacks. The daily scale price chart shows a blow off top with the long upper shadow. I expect the index to consolidate and possibly pullback to the upper boundary of the rising trend channel.

Volatility on Turkish Lira continues and the ETF is trying to hold above the lower boundary of its multi-year long consolidation at 17.6 levels. This is a monthly scale price chart and long-term consolidation is between 17.6 and 29 levels. Breakdown below 17.6 levels (consecutive daily closes) will suggest lower prices towards the chart pattern price target at 11. For now the trading range between 17.6 and 29 levels is intact.

Price chart of cash Gold price has been forming lower highs since the last quarter of 2020. Price is trading around the 200-day average at 1,800 levels. The chart pattern on monthly scale can become a descending triangle with the horizontal support at 1,680 levels. Another test of 1,680 levels can put the long-term uptrend in jeopardy. I’ve adjusted the upper boundary of the possible descending triangle. The resistance stands at 1,866 levels. Breakout above 1,866 levels will negate the descending triangle.

Silver remains range bound between 21.8 and 30 levels. There is also another short-term consolidation range between 21.8 and 24.7 levels. I’m weighing the possibility of a double bottom with the neckline standing at 24.7 levels. Failure to recover above the year-long average and target 24.7 levels can increase the likelihood of the latest consolidation becoming a bearish continuation. In that case I will closely monitor horizontal support at 21.8 levels.

The daily scale price chart of Silver shows much better the price action between the boundaries. Breakout above 24.7 levels will not only clear the horizontal resistance but also the 200-day average. Breakout above 24.7 can complete the possible double bottom and target the upper boundary of the rectangle consolidation at 30 levels. Last 2 days of the week, price moved above the 200-day average but it can still be early to say that it cleared the long-term average. I will monitor Silver for confirmation in the following week.

Copper continues to hold above the 200-day moving average. At this point I can conclude that price is in a trading range between 4.24 and 4.8 levels. I’m weighing the possibility of a symmetrical triangle forming between 4.2 and 4.8 levels. Breakdown below the 200-day average can result in a larger scale correction towards the next support at 3.3. As long as price remains above the 200-day average, I will treat this chart as an uptrend.

European Bund price is in a wide consolidation range between 169.3 and 179.7 levels. The trading range is possibly forming a 20 month-long rectangle. Bearish engulfing candlestick marked the minor high on the recent reversal. 167.6-169.3 area will act as support.

The U.S. 10 Year T-Note broke down the support area between 130 and 130.7. The 200-day moving average is forming resistance at 132.2 levels. Breakdown below 130 levels resumed the downtrend. 130-130.7 area becomes resistance. U.S. Treasuries are in a downtrend below the 200-day average. The weekly candle has a long lower shadow that can suggest short-term bottom.

Both Nifty 50 and Sensex has been in a strong and steady uptrend. Indian equity benchmarks possibly completed the reversion back to the mean. Both charts are now close to their previous highs which are acting as short-term resistance. For Sensex, short-term resistance stands at 62K and for Nifty it is at 18.6K. Wide trading range is between the 200-day averages and the minor highs.

The Dollar Index is gaining strength after forming a double bottom on the monthly scale price chart. Breakout above 93.43 was followed by a steady uptrend towards the price target at 97.23 levels. Previous resistance at 93.43 levels becomes the new support. Long-term price chart shows a wide range between 88.7 and 103 levels.

I’ve discussed USDJPY in the previous updates. I think the chart has completed the long-awaited breakout. Strong USD against Japanese Yen can target 125 levels in a short period of time. The pair is going through historical low volatility condition and  the possible breakout can be followed by strong price action (back to back monthly long white candles). For the breakout to succeed, price needs to accelerate on the upside.

The chart below is the 10 Year U.S. Treasury Yield Index. Price fell below the 200-day average for a day and quickly recovered. Yields possibly formed a multi-month long cup & handle continuation with the horizontal boundary acting as resistance at 17 levels. I am now monitoring this chart as a completed cup & handle with the price target of 23 levels. 16.9 becomes the new support.

An interesting chart pattern development is taking place on Australia S&P ASX 200 Index. I added 2 important levels to keep an eye on. If this chart pattern is a H&S top, the neckline is acting as support at 7,205. Breakdown can also breach the 200-day average suggesting a downtrend towards 6,840 levels. Chart pattern negation level is the high of the right shoulder at 7,465 levels. Breach above that level signaled the continuation of the uptrend with a price target of 7,850 levels. Two interlocking chart patterns are in focus. Possible H&S bottom reversal completed with the breakout above 7,465 levels. The short-term H&S bottom failed and now I’m one again focusing on the larger scale H&S top.

Another clean H&S top reversal can be identified on Netherlands AEX Index. 5 month-long H&S top has a neckline at 754 levels. The neckline is also overlapping with the 200-day average. Breakdown can confirm the H&S top with the price target of 694 levels.

Charts below review several ETFs that have similar technical outlook. If you like to trade range-bound price actions between well-defined boundaries, those setups are valuable for you. If you like to trade breakouts/breakdowns, any weakness in the following week can become a short signal. Rectangles can act as top reversals and reverse uptrends. Until that happens those well-defined ranges are offering trading opportunity between horizontal boundaries.

ISHARE MICRO CAP ETF (IWC) formed a 10 month-long rectangle. The ETF still didn’t recover above the 200-day average. Breakdown below 136 levels confirmed the rectangle as a top reversal with possible price target of 118 levels. I have given this index a week to prove itself but this week’s breakdown below 131.8 acted as the short signal for this ETF.

ISHARE EUROPE ETF (IEV) formed a 6 month-long rectangle with the lower boundary acting as support at 51.5 and the upper boundary as resistance at 55.7 levels. Breakout above 55.7 levels can resume the existing uptrend with the price objective at 59.7 levels. The ETF is offering trading opportunity between boundaries. Recovery back above the 200-day average put the bullish interpretation on the cards. Failure to remain above the 200-day average can once again target the lower boundary.

ISHARE MSCI EAFE ETF (EFA) formed a 6 month-long rectangle with the upper boundary acting as resistance at 82 and the lower boundary as support at 76.4 levels. Price recovered above the 200-day average. Breakdown below the horizontal support can result in a top reversal with the price target at 71 levels. Until we see a breakdown or breakout, the ETF will offer trading opportunity between boundaries. The short-term resistance is at 79.6 levels. Breakout above that can confirm a double bottom with the price target of 82 levels. Given that the price is now close to the lower boundary, I’m weighing the possibility of a breakdown.

ISHARES 0-5 YR TIPS BOND ETF (STIP.K) formed a 6 month-long rectangle with the lower boundary acting as support at 105.4 and the upper boundary as resistance at 107.1 levels. Price recovered back above the lower boundary on a closing basis. I was monitoring this ETF  to see more evidence of strength with price stabilizing above the 200-day average. It seems like rebound got rejected at the long-term average. Breakdown below horizontal support took place with gap opening. Rectangle can act as a top reversal with price target of 103.8 levels.

Invesco Dynamic Oil & Gas Services ETF formed an 8 month-long rectangle with the lower boundary acting as support at 2.98 and the upper boundary as resistance at 4.27 levels. The ETF rebounded from the well-defined horizontal support. Short-term double bottom completed with the breakout above neckline at 3.3 levels. Breakout above the minor high at 3.3 levels cleared the 200-day average and  met price target at 3.65 levels.

Below are some interesting bullish setups in Asia equities.

I’ve covered Singapore Strait Times Index in previous updates. The index has been consolidating in a well-defined range. After rebounding from the lower boundary, the index cleared the upper boundary at 3,230 levels. Breakout above 3,230 completed the 7 month-long rectangle with the price target of 3,420 levels.

Another text-book rectangle is developing on Indonesia IDX composite index. Though this one is on daily scale and slightly shorter-term than the rectangle on Singapore Index. The upper boundary of the rectangle is forming resistance at 6,745 levels. Breakout can target 6,900 levels.

China SSE Composite Index (larger universe) might be forming a rectangle chart pattern above the 200-day average. The upper boundary is acting as resistance at 3,720 levels. Breakout can target price objective at 4,100 levels. Price is still far from the resistance, so I still see a trading opportunity between the well-defined boundaries.

There is 1 new breakdown signal.

TECH CHARTS ALERT

---

TECH CHARTS WATCHLIST

---

AMERICAS

---

EUROPE

---

AURELIUS EQUITY OPPORTUNITIES SE & CO KGAA (AR4G.DE)

Aurelius Equity Opportunities SE & Co. KGaA is a Germany-based investment company, which concentrates primarily on the segments information technology and business services, industrials and chemicals, and lifestyle and consumer goods. The stock is listed on the Frankfurt Stock Exchange. Price chart formed an 8 month-long rectangle with the horizontal boundary acting as strong resistance at 30.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 30.90 levels will confirm the breakout from the 8 month-long rectangle with the possible chart pattern price target of 36.10 levels. (Learn more: Video Tutorial)

SSE PLC (SSE.L)

SSE PLC is an energy company. The Company is engaged in the generation, transmission, distribution and supply of electricity, in the production, storage, distribution and supply of gas and in other energy services. The stock is listed on the London Stock Exchange. Price chart formed a 4 month-long rectangle with the horizontal boundary acting as strong resistance at 1,685.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 1,710.00 levels will confirm the breakout from the 4 month-long rectangle with the possible chart pattern price target of 1,830.00 levels. The stock offers trading opportunity between the boundaries. (Learn more: Video Tutorial)

NORDIC SEMICONDUCTOR ASA (NOD.OL)

Nordic Semiconductor ASA is a Norway-based company engaged in the development and sell of integrated circuits and related solutions for short-range wireless communication. The Company specializes in ultra-low power (ULP) components, based on 2.4 Gigahertz (GHz) and Bluetooth Smart technology. The stock is listed on the Oslo Stock Exchange. Price chart formed a 4 month-long cup & handle continuation with the horizontal boundary acting as strong resistance at 314.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 323.00 levels will confirm the breakout from the 4 month-long cup & handle continuation with the possible chart pattern price target of 390.00 levels. The handle part of the pattern can be identified as a possible rectangle. (Learn more: Video Tutorial)

METROPOLE TELEVISION SA (MMTP.PA)

Metropole Television SA is a France-based audiovisual company that specializes in the production, distribution and marketing of television (TV) programs. The stock is listed on the Paris Stock Exchange. Price chart formed a 9 month-long rectangle with the horizontal boundary acting as strong support at 16.50 levels. Both boundaries were tested several times over the course of the chart pattern. A daily close above 19.9 levels will confirm the breakout from the 9 month-long rectangle with the possible chart pattern price target of 22.68 levels. Until there is a breakout in one direction the stock offers trading opportunity.  (Learn more: Video Tutorial)

IPSEN SA (IPN.PA)

Ipsen SA is a France-based biopharmaceutical group specialized in specialty care. The Company operates globally through two segments: Specialty Care and Consumer Healthcare. The stock is listed on the Paris Stock Exchange. Price chart formed a 14 month-long cup & handle continuation with the horizontal boundary acting as strong resistance at 92.90 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 95.70 levels will confirm the breakout from the 14 month-long cup & handle continuation with the possible chart pattern price target of 117.30 levels. The handle part of the pattern is possibly morphing into a rectangle. (Learn more: Video Tutorial)

NEXT PLC (NXT.L)

NEXT plc is a United Kingdom-based retailer offering clothing, footwear, accessories, beauty and home products. The stock is listed on the London Stock Exchange. Price chart formed an 8 month-long rectangle with the horizontal boundary acting as strong resistance at 8,200.00 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 8,445.00 levels will confirm the breakout from the 8 month-long rectangle with the possible chart pattern price target of 9,195.00 levels. (Learn more: Video Tutorial)

KEMIRA OYJ (KEMIRA.HE)

Kemira Oyj is a Finland-based Company, which offers sustainable chemical solutions for water intensive industries. The stock is listed on the Helsinki Stock Exchange. Price chart formed an 8 month-long rectangle with the horizontal boundary acting as strong resistance at 14.60 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 14.80 levels will confirm the breakout from the 8 month-long rectangle with the possible chart pattern price target of 16.00 levels. The stock offers trading opportunity between boundaries. Incase of a daily close below 12.90 levels rectangle can act as a top reversal and target 11.8 levels. (Learn more: Video Tutorial)

MIDDLE EAST & AFRICA

---

NATUREL YENILENEBILIR ENERJI TICARET AS (NATEN.IS)

Naturel Yenilenebilir Enerji Ticaret AS is a Turkey-based company engaged in the renewable energy sector. The stock is listed on the Istanbul Stock Exchange. Price chart formed a 15 month-long rectangle with the horizontal boundary acting as strong resistance at 47.10 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 48.50 levels will confirm the breakout from the 15 month-long rectangle with the possible chart pattern price target of 63.70 levels. Breakout can push the stock to all-time highs. Until there is a breakout confirmation, the stock offers trading opportunity between the boundaries. (Learn more: Video Tutorial)

DUBAI ISLAMIC INSURANCE & REINSURANCE COMPANY AMAN PJSC (AMAN.DU)

Dubai Islamic Insurance and Reinsurance Company PSC (Aman) is a United Arab Emirates-based company engaged in the provision of all classes of insurance and reinsurance products and services in accordance with the Islamic sharia principles. The stock is listed on the Dubai Stock Exchange. Price chart formed a year-long ascending triangle with the horizontal boundary acting as strong resistance at 1.185 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 1.22 levels will confirm the breakout from the year-long ascending triangle with the possible chart pattern price target of 1.50 levels. (Learn more: Video Tutorial)

ASIA

---

Australia and New Zealand Banking Group Limited provides a range of banking and financial products and services. The Company’s segments include Australia, New Zealand, Institutional, Pacific, and Technology, Services and Operations and Group Centre (TSO). The stock is listed on the Australia Stock Exchange. Price chart formed a 7 month-long rectangle with the horizontal boundary acting as strong resistance at 29.60 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 30.00 levels will confirm the breakout from the 7 month-long rectangle with the possible chart pattern price target of 32.20 levels. A daily close below 26.4 levels will confirm the breakdown with the possible price target of 24.3 levels. (Learn more: Video Tutorial)

OOH!MEDIA LTD (OML.AX)

oOh!media Limited is an Australia-based out-of-home (OOH) media company. The Company offers advertisers the platform to create engagement between people and brands through its portfolios in Australia and New Zealand. The stock is listed on the Australia Stock Exchange. Price chart formed a 9 month-long rectangle with the horizontal boundary acting as strong resistance at 1.91 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close above 1.97 levels will confirm the breakout from the 9 month-long rectangle with the possible chart pattern price target of 2.40 levels. (Learn more: Video Tutorial)