This is dedicated to the four markets that have been beaten and burnt, all of which hit their downside targets this past week. So what would be in store for these markets, more downside risks and pain, or an opportunistic technical rebound from extreme oversold conditions? Let us see…
FXI, the China ETF, had been very volatile in recent months and having failed the weekly 55EMA, it struggled to sustain the breakdown out of a range. Alas, this week, it was battered into a previously marked downside target zone, and is likely to reach the next downside target, another -5% lower.
The Nifty50 ETF, INDY, has had a terrible four weeks of late, and resting just above a support (formed by a previous Gap & Run). Slightly oversold, if the support can hold, it would be a possible consolidation for INDY. Else, a breakdown of the support line would see more downside to the targeted level shown.
The Emerging Markets ETF, EEM, closed within the targeted zone and looks bearish as ever. It appears to be more in,comes to further downside, of about -10%, to about 34.
Singapore ETF, EWS, and similarly the Straits Times Index, hit the downside target just last week and is looking forward to more downside, based on the last candlestick, and other technical indicators. Although somewhat severe, this chart actually looks very similar to FXI (China) particularly since June/July 2018. Pertinent point, since it was already identified that since the trade war slats between the US and China started, the EWS/ STI has been punished in tandem with the China markets. It has only been recently highlighted publicly by MAS two days ago that the impact will likely hit Singapore soon. Seriously? One would have seen the impacts in the charts very obviously since July 2018, also as highlighted in previous posts since early September about Singapore.
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