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CHINA SSE 50 INDEX & FTSE A 50 ETF

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Low volatility period begets high volatility and vice versa. Price charts when going through those low volatility periods form one of the classical chart pattern (symmetrical triangle, rectangle, flag/pennant, H&S continuation, right angle triangle) and alert us for a possible breakout. Breakouts from lengthy and low volatility consolidation periods are usually followed by strong breakouts and directional movements. We would like to capture those strong directional movements.

One of the best example for the cyclicality of volatility is the China SSE 50 Index. Strong directional move that took place in the first half of 2018 is now being followed by a tight consolidation (low volatility period) which is likely to be followed by sharp price action in the following weeks/months. Past 5 month’s price action formed a channel in a tight range. Breakout from the 5 month-long channel can either reverse the downtrend that has been intact since the beginning of the year, or resume the downtrend. In either case we are likely to see a strong directional movement. Resistance stands at 2,550 levels.

For those who would like to take advantage of a possible breakout/breakdown on China SSE 50 Index, I feature below the iShares FTSE A50 China Index ETF that is listed on the Hong Kong Stock Exchange.

ISHARES FTSE A50 CHINA INDEX ETF HKD (2823.HK)

The Ishares FTSE A50 China Index ETF aims to provide investment results that, before fees and expenses, closely correspond to the performance of the FTSE China A50 Index.The ETF is listed on the Hong Kong Stock Exchange. Price chart formed a 4 month-long descending triangle with the horizontal boundary acting as strong support at 11.9 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close below 11.7 levels will confirm the breakdown from the 4 month-long descending triangle with the possible chart pattern price target of 10.6 levels.

The charts below show another market, Singapore Derivatives Exchange, where China A50 index can be traded. Both the daily and weekly scale price charts show the developing rectangle with well-defined horizontal boundaries. The lower boundary of the 5 month-long consolidation has been tested several times. A decisive breakdown can confirm the rectangle as a bearish continuation with the possible chart pattern price target of 9,660 levels.

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With this knowledge, you can merge them with your investing system. In fact, some investors use my analyses to modify their existing style to invest more efficiently and successfully.

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As a Premium Member of Aksel Kibar’s Tech Charts,

You will receive:

  • Global Equities Report. Delivered weekly.
  • Classical charting principles. Learn patterns and setups.
  • Actionable information. Worldwide indices and stocks of interest.
  • Risk management advice. The important trading points of each chart.
  • Information on breakout opportunities. Identify the ones you want to take action on.
  • Video tutorials. How patterns form and why they succeed or fail.
  • Watch list alerts. As they become available so you can act quickly.
  • Breakout alerts. Usually once a week.
  • Access to everything (now and as it becomes available)
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    o Videos and video series
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GLOBAL EQUITY MARKETS – December 8, 2018

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Announcement: Dear Tech Charts members, We have included a new feature to Tech Charts website. At the bottom of each report we have incorporated comment platform DISQUS. Previous comment platform was not allowing members to post charts and have discussions. With this improvement, I hope to have detailed discussions with our members and possibly post breakout alerts related to each week's report. I also hope that Tech Charts members will be able to interact with each other through the DISQUS platform (at the bottom of each weekly report) to share their knowledge on different instruments available to take advantage of breakout opportunities. I hope we will all benefit from this new feature.

REVIEW

Global equity markets performance as measured by the iShares MSCI All Country World Index ETF (ACWI.O) reversed from its long-term moving average resistance at 71.3 levels. In the beginning of October the index broke down its 7 month-long consolidation and the 200-day moving average. Since then the ETF has challenged the strong resistance area between 71 and 71.5 levels but failed to breach higher. This week's sell-off pulled the ACWI ETF towards the minor support at 66.5 levels. Failure to hold above the short-term support can send the index to the next level at 63 levels. The iShares MSCI All Country World Index ETF is trading below its long-term average and is in a downtrend.

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GLOBAL EQUITY MARKETS – December 1, 2018

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REVIEW

The iShares MSCI All Country World Index ETF (ACWI.O) continues to consolidate below its long-term average at 71.4 levels. 71-71.4 area will act as strong resistance for the Global equity benchmark. Over the past few months the ETF has been consolidating in a wide range between 66.5 and 71 levels. I use the 200-day moving average as a trend filter. Price action below the long-term average warns us of possible weakness (in the form of further choppy price action or continued downward momentum).

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GLOBAL EQUITY MARKETS – November 24, 2018

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REVIEW

The longer the price remains below the long-term averages the more established that downtrend will become. The benchmark for the Global Equity Markets performance, iShares MSCI All Country World Index ETF (ACWI.O) broke down the lower boundary of its multi-month long consolidation and its long-term average around same time. Sharp sell-off was followed by a pullback to the chart pattern boundary. This week's price action resumed the downtrend. The minor low around October lows (66) will act as short-term support. Breakdown below the October lows can send the ACWI ETF towards the next support level at 63 levels. Strong resistance area remains between 71 and 71.5 levels. Until we see a recovery above the resistance area (71-71.5), we will expect the weakness to resume in the Global Equity Markets.

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CHINA SSE 50 INDEX & FTSE A 50 ETF

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Low volatility period begets high volatility and vice versa. Price charts when going through those low volatility periods form one of the classical chart pattern (symmetrical triangle, rectangle, flag/pennant, H&S continuation, right angle triangle) and alert us for a possible breakout. Breakouts from lengthy and low volatility consolidation periods are usually followed by strong breakouts and directional movements. We would like to capture those strong directional movements.

One of the best example for the cyclicality of volatility is the China SSE 50 Index. Strong directional move that took place in the first half of 2018 is now being followed by a tight consolidation (low volatility period) which is likely to be followed by sharp price action in the following weeks/months. Past 5 month’s price action formed a channel in a tight range. Breakout from the 5 month-long channel can either reverse the downtrend that has been intact since the beginning of the year, or resume the downtrend. In either case we are likely to see a strong directional movement. Resistance stands at 2,565 levels.

For those who would like to take advantage of a possible breakout/breakdown on China SSE 50 Index, I feature below the iShares FTSE A50 China Index ETF that is listed on the Hong Kong Stock Exchange.

ISHARES FTSE A50 CHINA INDEX ETF HKD (2823.HK)

The Ishares FTSE A50 China Index ETF aims to provide investment results that, before fees and expenses, closely correspond to the performance of the FTSE China A50 Index.The ETF is listed on the Hong Kong Stock Exchange. Price chart formed a 4 month-long descending triangle with the horizontal boundary acting as strong support at 11.9 levels. The horizontal boundary was tested several times over the course of the chart pattern. A daily close below 11.7 levels will confirm the breakdown from the 4 month-long descending triangle with the possible chart pattern price target of 10.6 levels.

Tech Charts Membership

By becoming a Premium Member, you’ll be able to improve your knowledge of the principles of classical charting.

With this knowledge, you can merge them with your investing system. In fact, some investors use my analyses to modify their existing style to invest more efficiently and successfully.

Get Access Now

As a Premium Member of Aksel Kibar’s Tech Charts,

You will receive:

  • Global Equities Report. Delivered weekly.
  • Classical charting principles. Learn patterns and setups.
  • Actionable information. Worldwide indices and stocks of interest.
  • Risk management advice. The important trading points of each chart.
  • Information on breakout opportunities. Identify the ones you want to take action on.
  • Video tutorials. How patterns form and why they succeed or fail.
  • Watch list alerts. As they become available so you can act quickly.
  • Breakout alerts. Usually once a week.
  • Access to everything (now and as it becomes available)
    o Reports
    o Videos and video series
  • Multi-part webinar course. You learn the 8 most common charting principles.
  • Webinars. Actionable and timely advice on breaking out chart patterns.

For your convenience your membership auto renews each year.

Get Access Now

GLOBAL EQUITY MARKETS – November 17, 2018

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REVIEW

The benchmark for the Global Equity Markets performance, iShares MSCI All Country World Index ETF (ACWI.O) is trading below its long-term (200-day) average. Last one month's price action formed choppy and sideways consolidation. Earlier the ACWI ETF broke down its multi-month-long consolidation and ended a low volatility period. Volatility is cyclical. Low volatility begets high volatility and vice versa. Currently the ETF is consolidating its earlier sharp price decline from 75 to 66 levels. Strong resistance area is between 71 and 71.6 levels. Long-term support stands at 63 levels.

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GLOBAL EQUITY MARKETS – November 10, 2018

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REVIEW

The iShares MSCI All Country World Index ETF (ACWI.O) found resistance at the long-term 200-day (40-week) moving average. Last two week's price action can be a pullback to the broken support levels between 71 and 71.8. Until I see a recovery above the 200-day average, I will expect the choppy downward price action to resume. Global equities are likely to move in a wide trading range in the following weeks. Strong resistance area stands between 71 and 71.8 levels.

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GLOBAL EQUITY MARKETS – November 3, 2018

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REVIEW

Strong rebound on the iShares MSCI All Country World Index ETF pulled the price back to February lows. Strong resistance area stands between 70 and 71.8 levels. After a sharp drop and increase in volatility, we should expect more choppy price action resulting in a short-term consolidation. There is no chart pattern development that would suggest a short-term bottom at this stage. The ACWI ETF is trading below its long-term average.

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GLOBAL EQUITY MARKETS – October 20, 2018

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REVIEW

The iShares MSCI All Country World Index ETF (ACWI.O) is trying to hold above February 2018 lows. After reversing from the horizontal resistance at 74.8, the ETF fell below its long-term average and currently is trading below the 200-day average. This week's candlestick was a "doji". It shows that price found short-term support. Failure to hold above February lows can send the ETF towards the next strong support area at 63 levels.

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GLOBAL EQUITY MARKETS – October 13, 2018

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REVIEW

Since the beginning of 2018, the performance between Emerging Markets and Developed Markets diverged. Emerging Markets have underperformed the Developed Markets by around 15%. Two charts below show the relative performance ratio between EEM and ACWI and also the MSCI indices, MSCI Emerging Markets Index vs. MSCI World Markets Index. You can see the fluctuations on the ratio over the years.

2016-2017 was a period of EM outperformance. In the beginning of 2018, the ratio reversed sharply and the past 10 months resulted in a massive underperformance for the Emerging Markets. We might be at an inflection point as the ratio is now testing 2016 lows. Emerging Markets might start outperforming the Developed Markets once again. (The ratio is calculated by dividing two time series EEM & ACWI and indexing it to 1 on the 1st January 2018)

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