Top pick for the day - MSCI Asia Ex Japan

Turning down again?

The MSCI Asia Ex Japan Index (MXASJ) appears to have reversed after failing to breakout above the downtrend channel resistance recently.

As mentioned in our previous note on MAXSJ (see 16th October issue), the index is likely to see weakness for another year or more, targeting 334-429.

In the immediate term, we also see more weakness here on the index.

The recent reversal from the resistance trend line could potentially take prices down to retest its 50-day SMA, currently at 500 (another 4% lower).

With the longer term indicator still looking marginally positive, the rebound from the August low of 466 could extend into the early part of 2016.

The ST alternative is still valid as the wave-iv move did not cross over into the wave-i low.

But both counts point to more weakness in the immediate term.

Closing below 470 would confirm that the alternative view is in play. For now, continue to look lower for the week or two. (Read Report)

Source : CIMB Research