Author: Derek Higa

Derek Higa is a senior equity analyst and a lead for the APAC region and the Consumer Cyclical sector. He serves on the Global Focus List Committee, which approves all equity recommendations for developed, emerging, and frontier markets, and compiles Asia Watch, a weekly recap of regional investing news. Since joining William O’Neil + Company in 2005, he has lent his market expertise to alpha capture, product development, and historical studies on outperforming stocks. Derek graduated summa cum laude from California State University Los Angeles with a B.S. in Finance and Information Systems. He holds a Series 65 securities license.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) continues to trade above its rising 21-DMA and remains constructive near its 52-week high. Markets must continue to hold above their rising short-term moving averages and rise above key resistance levels.
  • Eight markets, including Japan, Hong Kong and India, are in a Confirmed Uptrend. Two markets are in an Uptrend Under Pressure. Three markets, including China and Australia, are in a Rally Attempt.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) bounced off its 21-DMA and made a new 52-week high. Major markets are trading constructively above logical support. Focus on stocks trading above logical support and close to pivot with rising relative strength. Trim extended ideas and stocks that have failed to hold above key moving averages.
  • Eight markets, including Japan, Hong Kong and India, are in a Confirmed Uptrend. Two markets are in an Uptrend Under Pressure. Three markets, including China and Australia, are in a Rally Attempt.
  • Technology has been improving over the last four weeks, and has entered the top-right quadrant (Improving and Outperforming) of the APAC Sector Rotation Chart. It is among the sectors that have seen highest improvement in breadth. The improvement in Technology is led by Semiconductor stocks.
  • Technology is outperforming in all major APAC market except India, based on median 3-month RS Rating. Only select hardware-related Industry Groups (IGs) have outperformed since the selloff in April. Most hardware IGs are lagging over the 52-week period. Elec-Semiconductor Equip and Elec-Scientific/Msrng have outperformed other IGs over the shorter term – the last 4-13 weeks. Software IGs, such as Desktop and Gaming, are among the highest year-to-date gainers and are due for profit taking and consolidation.
  • Refer to page 9 for minicharts of extended Technology names in APAC that we recommend to trim positions. Refer to pages 10-11 for leaders within Technology that have superior WON metrics, are not extended and are trading above all key moving averages with rising relative strength.
  • Highlighted Focus List Idea: Advantest (AB@N.JP; 6857 JP). Refer to page 7 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) bounced sharply off its 21-DMA and made a new 52-week high. Major markets are trading constructively above logical support. Focus on stocks that are trading above logical support and close to pivot, with rising relative strength.
  • Six markets, including Japan and Hong Kong, are in a Confirmed Uptrend. Three markets, including India, are in an Uptrend Under Pressure. Four markets, including China and Australia, are in a Rally Attempt.
  • The U.S. Dollar Index has declined 10% since January 2025, breaking key support and testing a 14-year trendline. Further weakness could signal the start of a secular bearish trend, which historically supports emerging market outperformance. Refer to page 9 for the price performance of Developed and Emerging APAC stock markets versus the U.S. during periods where the Dollar declined more than 10% since 2000.
  • Emerging markets, particularly China, India and South Korea, are leading gains as capital flows shift amid U.S. dollar weakness and Fed rate cuts, with EEMA up 19% versus the S&P 500’s 4% gain year-to-date. Refer to pages 10 and 11 for minicharts of large cap EEMA constituents with strong WON metrics.
  • Highlighted Focus List Idea: HD Hyundai Electric (EES.KR; 267260 KS). Refer to page 7 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

 

  • The MSCI Asia Ex Japan index (AAXJ) pulled back after facing resistance along its October 2024 high. Major markets continue to trade constructively above logical support despite an elevated average distribution day count. Focus on stocks that are trading above logical support and close to pivot with rising relative strength.
  • Seven markets, including Japan and Hong Kong, are in a Confirmed Uptrend. Two markets, including India, are in an Uptrend Under Pressure. Three markets, including China and Australia, are in a Rally Attempt. Thailand is in a Downtrend.
  • Hong Kong’s Hang Seng Index continues to rise along its 21-DMA and is near the key resistance of its 52-week high. Hong Kong is among the leading global markets year-to-date with a gain of 19.5%, trailing only behind South Korea.
  • Breadth in Hong Kong continues to improve and is currently at 71%. Breadth between 50-70% is considered healthy and breadth above 70% indicates a higher likelihood for the markets to pullback. By market cap, large caps are more extended compared to small and mid-caps. Leaders (stocks with an RS Rating greater than 70) in Hong Kong continue outperform the index.
  • Health Care and Basic Material are the leading sectors in Hong Kong, based on both median RS Rating and 3-month RS Rating. Refer to page 9 for a list of notable leaders in Hong Kong. These stocks have strong WON metrics that are above key moving averages and are less than 10% off highs.
  • Highlighted Focus List Idea: Xiaomi (XIAI.HK; 1810 HK). Refer to page 7 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) continues to make gains, rising to year-to-date highs. Major markets are trading constructively above logical support levels despite elevated distribution days. Focus on stocks that are trading above logical support and are close to pivot with rising relative strength.
  • Seven markets, including Japan and Hong Kong, are in a Confirmed Uptrend. Two markets, including India, are in an Uptrend Under Pressure. Four markets, including China and Australia, are in a Rally Attempt.
  • We have prepared a presentation on current topics, themes and market trends. This includes improving breath in the APAC region, a China 2018 tariff history, South Korea post-election clarity, Japan’s narrowing value versus growth spread, India’s institutional support, and the Taiwan Tech recovery off lows. For more detail and ideas, see our APAC Overview Presentation, attached and here.
  • Highlighted Focus List Idea: Xiaomi (XIAI.HK; 1810 HK), King Slide Works (KSW.TW; 2059 TT), Hindustan Aeronautics (IAD.IN; HNAL IN), KB Financial (KHB.KR; 105560 KS), Hansoh Pharma (HANP.HK; 3692 HK), and Konami (KONA.JP; 9766 JP). Refer to page 5-10 for annotated charts.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) found support along its rising 21-DMA and is consolidating near its year-to-date high. Markets must hold above their key support levels to remain constructive in the near term. Presidents Trump and Xi are expected to speak on tariffs this week.
  • Seven markets, including Japan and Hong Kong, are in a Confirmed Uptrend. Two markets, including India, are in an Uptrend Under Pressure. Three markets, including China and Australia, are in a Rally Attempt. Thailand is in a Downtrend. We shifted India to an Uptrend Under Pressure from a Confirmed Uptrend, after it breached its 21-DMA for the first time since April.
  • South Korea is the only major market trading close to its year-to-date high. Lee Jae-myung won South Korea’s presidency, ending political turmoil and pledging economic revival, deregulation and support for low-income groups. His government will also seek more time for U.S. trade talks.
  • The Japanese Yen has been appreciating against the U.S. Dollar since May, and is approaching its key support level. The spread between the Value and Growth indices in Japan has narrowed compared to before the announcement of reciprocal tariffs. Breadth continues to improve in Japan, with large caps marginally leading in terms of median RS Rating. Retail, Capital Equipment and Technology are among the leading sectors.
  • Highlighted Focus List Idea: Rakuten Bank (RAKB.JP; 5838 JP). Refer to page 8 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) is consolidating near its year-to-date high. Major markets have pulled back from recent highs and are approaching logical support levels. Focus on stocks that are trading above logical support and close to pivot with rising relative strength.
  • Eight markets, including Japan, South Korea, India and Hong Kong, are in a Confirmed Uptrend. Three markets, including China, are in a Rally Attempt. Malaysia and Thailand are in an Uptrend Under Pressure. South Korea was upgraded to a Confirmed Uptrend from a Rally Attempt.
  • South Korea’s KOSPI broke out to a new year-to-date high and is among the leading APAC markets year-to-date, with a price return of 11.3%. The market is looking past the political uncertainty that started in December. It may be resolved with the election of a new President next week. The central bank’s dovish sentiment and interest rate cut are also positive for the market.
  • In South Korea, breadth continues to improve and is at the highest level in the last 26 weeks. Improvement in breadth was across all market cap categories. By sector, Capital Equipment, Financial and Consumer Staple are leading, while Technology is lagging. Refer to page 11 for a list of leaders in South Korea across all market cap with rising relative strength (RS greater than 70 and 3-month RS greater than 70). The stocks near pivot are highlighted in bold.
  • Highlighted Focus List Idea: HD Hyundai Heavy Industries (HH3.KR; 329180 KS). Refer to page 8 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) is consolidating after making a year-to-date high. The majority of markets are trading constructively. Focus on stocks that are breaking out, building the right side of bases or trading close to pivot, with rising relative strength. Avoid extended ideas.
  • Nine markets, including Japan, India and Hong Kong, are in a Confirmed Uptrend. Four markets, including China and South Korea, are in a Rally Attempt. The average distribution day count is close to 2.
  • Technology, which was weakening in the APAC Sector Rotation Chart, started to improve in the last three weeks and is moving towards the top-right quadrant (Outperforming over 26 weeks and improving over 4 weeks). The Technology sector’s improvement in recent weeks coincided with improvement in AI-related stocks in the U.S. Nvidia’s results next week will be the near-term catalyst for Technology stocks.
  • However, the Technology sector’s performance within APAC markets is mixed. Technology stocks in Japan, Hong Kong and Australia are leading, led by Software-related Industry Groups. In other major APAC markets, Technology is bouncing off lows with only select ideas looking constructive. Broadly, Semiconductor- and Hardware-related stocks still face overhead resistance.
  • Refer to page 10 for a list of constructive AI- and data center-related beneficiaries across APAC markets. Refer to page 11 for a list of constructive Technology ideas across APAC with rising relative strength (RS Rating greater than 70).
  • Highlighted Focus List Idea: Xiaomi (XIAI.HK; 1810 HK). Refer to page 9 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) broke above the December 2024 high of $77.5 and made a five-month high. The U.S.-China trade de-escalation has shifted the narrative positively and market sentiment has improved. Focus on stocks trading close to pivot with rising relative strength.
  • Nine markets, including Japan, India and Hong Kong, are in a Confirmed Uptrend. Four markets, including China and South Korea, are in a Rally Attempt. Hong Kong was upgraded to a Confirmed Uptrend from a Rally Attempt after the index staged a Day-20 follow-through day.
  • The reduction in U.S.–China tariffs and better-than-expected trade negotiation outcomes lifted global markets, with key APAC indices such as Japan, India and Taiwan clearing resistance levels. A sustained rally depends on further progress in trade talks, and supportive central bank actions.
  • Compared to 2018, the current environment benefits from a rate-cutting cycle and faster resolution of trade tensions. Markets have bottomed before the 90-day truce, unlike in 2018 when they bottomed after. Look for continued positive catalysts and the Hang Seng to form higher lows and higher highs.
  • We are noticing broadening of strength in Hong Kong. The number of near-pivot stocks is on a gradual rise. Most sectors, except Health Care, are gaining momentum, with an increase in stocks trading above their 50-DMA. Refer to page 12 for a list of constructive leaders in Hong Kong.
  • Highlighted Focus List Idea: Shanghai Chicmax Cosmetic (SHCC.HK; 2145 HK). Refer to page 7 for an annotated chart

APAC Weekly Summary + IG RS Point to Broad Theme + Marico

Posted on by Derek Higa

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The MSCI Asia Ex Japan index (AAXJ) gapped up and reclaimed its 50- and 200-DMAs for the first time since March. We recommend a gradual approach to increasing risk. Focus on stocks that are building the right side of bases or are trading close to pivot, with rising relative strength.
  • Seven markets, including Japan, India and Taiwan, are in a Confirmed Uptrend. Six markets, including China, Hong Kong and South Korea, are in a Rally Attempt. There were no market condition changes over the last week.
  • The Taiwan dollar appreciated strongly versus the U.S. dollar this week. The Malaysian ringgit also saw a similar move, although on a smaller scale. Strengthening domestic currencies could be reflect ongoing U.S. trade negotiations. and will put pressure on export-reliant companies if it continues.
  • Across key APAC markets, domestic-oriented or country-focused themes are leading given the uncertainty around trade policies. Defense-related industry groups are leading in India and South Korea. Refer to page 8 for constructive themes across APAC, and page 9 for leaders within these themes. Near-pivot stocks are highlighted within the list.
  • Highlighted Focus List Idea: Marico (MRC.IN; MRCO IN). Refer to page 7 for an annotated chart.