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) 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.

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 close to testing resistance along the confluence of its 50- and 200-DMAs. We recommend a gradual approach to increasing risk. Indices must now rise above resistance levels to raise conviction in a sustainable rally.
  • 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.
  • India has the highest percentage of stocks above their 50-DMA among APAC markets. It also has a higher breakout count as a percentage of total liquid stocks. In April, we have added more India ideas to the Focus List compared with other APAC markets, signaling continued strength.
  • Technology stocks remain weak across most APAC markets, with low breadth, except in Japan. Domestically-focused and defensive sectors, such as Health Care, Consumer Staple, Retail and Financial, are outperforming amid ongoing tariff uncertainty.
  • Refer to page 8 for a list of leaders that are trading near pivot across APAC (outside of the Focus List).
  • Highlighted Focus List Idea: Solar Industries (SXO.IN; SOIL IN). 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 off its recent low and retook its 21-DMA. We recommend a gradual approach to increasing risk in markets that have staged a follow-through day. We prefer indices to rise above resistance levels to raise our conviction in a sustainable rally.
  • India, Japan and Taiwan had a follow-through day. Five markets are in a Confirmed Uptrend. Eight markets, including China and Hong Kong, are in a Rally Attempt.
  • India is the only major market trading above all key moving averages, after staging a day-6 follow-through day. Personal tax cuts, the Reserve Bank of India’s dovish stance, low inflation and eased liquidity norms are boosting domestic consumption and credit growth. A potential U.S.-India trade agreement and a falling U.S. Dollar Index could further attract foreign flows to India.
  • In India, market breadth has improved sharply since March, with Large Caps leading. Financial and Consumer Staple are outperforming based on median RS Rating. Refer to page 14 for a list of leaders in India (outside the Focus List).
  • Refer to pages 9 and 10 for a list of constructive ideas (outside the focus list) with high relative strength in Japan and Taiwan, respectively.
  • Highlighted Focus List Idea: Kaynes Technology India (KT1.IN; KAYNES IN). 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) bounced off its recent low and is trading below all key moving averages. We recommend a defensive approach given the uncertainty around tariffs. Stay patient and wait for markets to stage a follow-through day before increasing risk. If you must stay invested, focus on defensive stocks with lower betas and rising relative strength.
  • Singapore and Indonesia are in a Confirmed Uptrend. Eleven markets, including Japan, China and Hong Kong, are in a Rally Attempt.
  • Several markets, including Hong Kong, India and Taiwan, along with the U.S. and Europe, have avoided follow-through days due to lower day/day volume. The lack of institutional support lowers the probability of an oversold rally persisting in our view. We are waiting for markets to stage a proper follow-through days before raising conviction.
  • The number of stocks near pivot in India, Hong Kong and Japan is close to a three-year low in each market. Despite a lower number of near-pivot ideas, the number of failed bases in India is close to a three-year low, implying leaders are constructive. Large caps are leading in India and Hong Kong but lagging in Japan.
  • We continue to notice rotation into defensive, domestic-oriented sectors such as Consumer Staple and Utility. Refer to pages 11-13 for stocks of interest in Hong Kong, Japan and India. These stocks have RS Ratings above 70 and are constructive compared to the market.
  • Highlighted Focus List Idea: Radico Khaitan (RKT.IN; RDCK:IN).

APAC Weekly Summary + Downtrend to Narrative Change + Giant Biogene

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 down and is at a 52-week low after undercutting its April 2024 low. We recommend a defensive approach given the uncertainly around tariffs. If possible, raise cash and wait for volatility to settle. If you must stay invested, focus on defensive stocks with lower betas and rising relative strength.
  • All APAC markets are in a Downtrend. Singapore, Hong Kong and China were downgraded to a Downtrend from an Uptrend Under Pressure.
  • The U.S. imposed a 10% minimum tariff on all countries except Canada and Mexico, and reciprocal tariffs based on trade surpluses with the U.S. The tariffs levied on APAC countries were higher than the rest of world, which is negative for the APAC markets. The U.S. and China are engaged in an escalating trade war, with reciprocal tariffs on reciprocal tariffs. The selloff in global equities following the imposition of reciprocal tariffs has led to reduction in Focus List Ideas across all geographies.
  • In 2018, when markets sold off due to tariffs imposed by the first Trump administration, they bottomed when Central Banks intervened to support economies, and when a limited trade agreement was reached between the U.S. and China. If history is to repeat, we need to see a follow-though day, along with any of these positive catalysts. Follow-through days without the support of positive sentiment have a high chance of failure.
  • Across APAC markets, we are seeing rotation into defensive, domestic-oriented sectors such as Consumer Staple and Utility. Refer to pages 17-19 for stocks of interest in Hong Kong, Japan and India that are outside the Focus List. These stocks have an RS Rating above 70 and held up relatively compared to the market

APAC Weekly Summary + China HK Constructive Into Liberation Day + Hansoh

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) breached its 50-DMA and is currently testing support along the confluence of its 100- and 200-DMAs. We recommend a cautious approach given the uncertainly around tariffs. Stay patient and wait for markets in a Downtrend to establish a new low and stage a follow-through day, before increasing risk.
  • Singapore is in a Confirmed Uptrend. Hong Kong and China are in an Uptrend Under Pressure. Six markets, including India and Australia, are in a Rally Attempt. Four markets, including Japan, Taiwan and South Korea, are in a Downtrend.
  • The U.S. is set to announce reciprocal tariffs, potentially 20% on most goods, creating business uncertainty, inflation risks and possible retaliation. India and South Korea are likely to be most affected due to high tariff rates and strong trade ties with the U.S.
  • Despite market pressure, Hong Kong has held up well, with Health Care emerging as the strongest sector based on RS Rating, while Technology has weakened but remains a leader. Biotech and pharmaceutical stocks are outperforming. Refer to page 10 for a list of stocks of interest in Hong Kong.
  • Highlighted Focus List Idea: Hansoh Pharmaceutical (HANP.HK; 3692 HK). 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) pulled back from resistance along its February high of $77.5. We recommend a cautious approach. Focus on leading stocks that are trading close to the pivot of their bases with rising relative strength. Reduce stocks that fail to hold above logical support levels.
Singapore is in a Confirmed Uptrend. Three markets, including China and Hong Kong, are in an Uptrend Under Pressure. Nine markets, including Japan, Taiwan and India, are in a Rally Attempt.
Hong Kong and China were shifted to an Uptrend Under Pressure from a Confirmed Uptrend. While we see broadening in other sectors in Hong Kong, Technology is pulling back. We recommend trimming profits in extended ideas. Refer to page 10 for a list of constructive stocks in Hong Kong outside the Focus List.
India cleared multiple resistance levels but has yet to stage a follow-through day. However, breadth measured by the percentage of stocks trading above their 50-DMA jumped over the last week. Basic The Material and Financial sectors continue to lead in India. Refer to page 12 for a list of leaders in India.
In Japan, the Nikkei 225 is below its 200-DMA, while the Topix is above its 200-DMA. The outperformance of the Topix versus the Nikkei 225 is close to a 10-year high. Value stocks in Japan are leading over the past four weeks. Refer to page 16 for a list of constructive value ideas in Japan (P/E ratio less than 15).
Highlighted Focus List Idea: Shriram Finance (SNN.IN; SHFL IN). Refer to page 8 for an annotated chart.

APAC Weekly Summary

Posted on by Derek Higa

Key points:
• The MSCI Asia Ex Japan index (AAXJ) is above all key moving averages and is testing resistance near $77.5. We recommend a cautious approach. Hong
Kong and China are trading positively. Stay patient and wait for markets in a Downtrend / Rally Attempt to stage a follow-through day before increasing
risk.
• Hong Kong and China are in a Confirmed Uptrend. South Korea and Singapore are in an Uptrend Under Pressure. Seven markets, including Japan and
Taiwan, are in a Rally Attempt. Indonesia and New Zealand are in a Downtrend.
• The latest consumption stimulus plan in China focuses on income growth, trade-ins for consumer goods and improving service consumption, with sectors
such as auto aftermarket, tourism and consumer electronics likely to benefit.
• Unlike the 2018 market decline driven by Fed rate hikes and U.S.-China trade war uncertainty, today’s backdrop features a rate cut cycle in the U.S.,
ongoing China stimulus and a more diversified Chinese trade strategy. Stocks with a steady RS line in past downturns outperformed, as highlighted in
our historical study. Sticking with high-RS names should lead to better returns in a rebounding market.
• Hong Kong continues to be the top-performing market in 2025, driven initially by Technology stocks, but early signs suggest broader participation. India
is recovering from lows, but will require a follow-through day to turn constructive.
• Highlighted Focus List Idea: JD.com (JDC.HK; 9618 HK). Refer to page 8 for an annotated chart.