The MSCI Asia Ex Japan Index (MXASJ) has responded to the resistance trend line from the May highs.
Last Friday, we warned that the MSCI World Index could potentially be heading lower in the coming weeks and the MXASJ looks to be no different.
The longer term charts for MXASJ continues to look weak in our opinion (see 2nd November issue), targeting the 356.25 levels, which is the 0.618x the length of the 2007-2008 fall.
In the near term, as long as 518.52 is respected, we continue to see more weakness for Asian stock markets.
The key support level of 470.97 is likely next to be tested. Below that said support would be negative for the index.
Falling below 431.72 would suggest that a sharper fall could be on the cards. For now, look for weakness in the immediate term. (Read Report)
Source : CIMB Research