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 + 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.

APAC Weekly Summary

Posted on by Derek Higa

Key points:
• The MSCI Asia Ex Japan index (AAXJ) has found support along the confluence of its 50- and 200-DMA. We recommend a cautious approach amid
tariff uncertainty. Stay patient and wait for volatility to settle and for indices to hold or consolidate above logical support levels. Reduce positions in
stocks that are failing to hold above logical support levels and marking lower lows.
• Hong Kong is in a Confirmed Uptrend. South Korea and Singapore are in an Uptrend Under Pressure. Six markets, including Japan and Taiwan, are in
a Downtrend. Four markets, including China and India, are in a Rally Attempt.
• Hong Kong is the best-performing major market across the globe in 2025, gaining 18.6% year to date, while China has gained 0.2%. The divergence
is explained by mega-cap Technology stocks that are listed only in Hong Kong. Japan, India and the U.S. are the significant underperformers. Refer
to page 11 for a list of near-pivot leaders (RS > 70) in Hong Kong.
• From a historical perspective, China has outperformed the U.S. despite declines in U.S. markets in the past. Currently, China is outperforming the
U.S. by 6.3% based on rolling three-month returns. China’s relative outperformance versus the U.S. tended to reverse after touching ~20% in the
past, which implies room for near-term outperformance from China.
• We are yet to see rotation into defensive stocks in the APAC Ex China and Hong Kong region. On a median basis, low-PE, high-dividend-yield and
low-beta stocks are not outperforming other categories. Refer to page 12 for a list of defensive ideas in APAC outside China and Hong Kong. These
have low beta (<1) and a high dividend yield (>2.5%) and have a 3M RS Rating of above 70.
• Highlighted Focus List Idea: Tencent Holdings (TCNT.HK; 700 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 the December 2024 high of $77.5 and breached its 100- and 200-DMA. We recommend a cautious approach amid tariff uncertainty. Wait for volatility to settle and for indices to hold above logical support levels.
  • Hong Kong and Singapore are in a Confirmed Uptrend. South Korea and Taiwan are in an Uptrend Under Pressure. Five markets, including China, are in a Rally Attempt. Four markets, including Japan and India, are in a Downtrend.
  • Chinese indices have outperformed the U.S. markets since the stimulus announcements by China in late-September 2024. China’s Two Sessions set a 5% GDP growth target and the highest budget deficit since 2010, signaling a strong commitment to economic stimulus. Look for further policy details at the ongoing Two Sessions meeting.
  • Despite recent tariff hikes under the Trump Administration, Chinese markets have remained resilient, driven by strong performance of the Technology sector. Since 2019, China has reduced its reliance on U.S. exports, shifting towards ASEAN and other regions.
  • The initial market rally in Hong Kong has been led by Technology stocks, but as more stimulus measures are introduced, look for strength to broaden. Health Care and Technology, followed by Financial, are leading in the near term as measured by their median three-month RS Rating. Refer to page 12 for stocks of interest in Hong Kong.

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 testing resistance at its December 2024 high of $77.5, and is 9% off highs. We recommend a cautious approach. Look for markets to hold above logical support levels. Focus on stocks that are holding above key moving averages with rising relative strength.
  • Three markets, including Hong Kong and South Korea, are in a Confirmed Uptrend. Four markets, including Japan and Taiwan, are in an Uptrend Under Pressure. Three markets, including China, are in a Rally Attempt. Three markets, including India, are in a Downtrend.
  • Japan’s Nikkei 225 rebounded from the Yen carry trade unwinding-related fall in August 2024, and has been rangebound between 37,700-40,400. Since the start of 2025, value stocks are outperforming growth stocks in Japan.
  • The Bank of Japan continues to raise interest rates as inflation comes in line with its forecast. Appreciation of the Yen and rising Japanese interest rates, along with weakening macro data in the U.S., increases the possibility of further unwinding of Yen carry trades in global markets.
  • Prior leaders in Japan before the August 2024 selloff, like Energy and Utility, were the lagging sectors in the last six months. Transportation followed by Technology and Financial, are the leading sectors in this rangebound market.
  • Refer to page 12 for a list of high Relative Strength ideas in Japan. These are trading above key moving averages, are under accumulation and have rising relative strength (Relative Strength > 80).
  • Highlighted Focus List Idea: Yonex (YONX.JP; 7906 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) retook its 100-DMA and is above all key moving averages. Focus on stocks that are holding above key moving averages with rising relative strength.
  • Five markets, including Hong Kong and South Korea, are in a Confirmed Uptrend. Four markets, including Japan, India and Taiwan, are in an Uptrend Under Pressure. Four markets, including China, are in a Rally Attempt.
  • Technology is in the top-right quadrant of the sector rotation chart. Multiple catalysts over the past month, including the success of DeepSeek, have resulted in Technology’s outperformance. NVDA’s results next week will be a key catalyst.
  • The outperformance of Technology is more pronounced in Hong Kong. Hardware-, Software-, Internet- and Telecom-related Industry Groups have led gains. In Japan, software and internet groups are leading within Technology. In South Korea and Taiwan, semiconductor related-Industry Groups are leading.
  • Refer to page 11 for a list of Technology leaders across APAC markets.
  • Highlighted Focus List Idea: ASE Technology (AIH.TW; 3711 TT). Refer to page 8 for an annotated chart.

APAC Weekly Summary + HK Resurgence + BYD

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) retook its 50- and 200-DMAs and is 10% off highs. We recommend a cautious approach as markets continue to be volatile following the announcement of tariffs. Focus on stocks that are holding above key moving averages with rising relative strength.
  • The strength of the U.S. Dollar has led to underperformance of Emerging APAC markets. India, Thailand, Malaysia, Indonesia and the Philippines are making 52-week lows. The U.S. Dollar Index pulled back from highs and is testing support at its 50-DMA.
  • The Hang Seng Index has cleared multiple resistance levels and is the leading APAC market in 2025. Large caps have led the gains since the Hang Seng’s low in January. We need to see breadth stabilize and improve going forward. The Two Sessions meeting in early March is the next catalyst for the market.
  • Multiple catalysts, such as DeepSeek, subsidies for consumer electronics, Ablibaba’s LLM model and BYD’s unveiling of its intelligent driving system, are positive for Technology stocks, and have led to their outperformance. Currently, 79% of Technology stocks have an RS Rating of above 70.
  • Refer to page 11 for a list of leaders in Hong Kong which have an RS Rating of above 80, and have gained more than 10% year-to-date. Refer to page 12 for a watchlist of Chinese ADRs with constructive technical setups.
  • Highlighted Focus List Idea: BYD ‘H’ (BYD.HK; 1211 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) is testing resistance along the confluence of its 50- and 200-DMAs. We recommend a cautious approach as markets are likely to be volatile following the announcement of tariffs.
  • Four markets, including Hong Kong and India, are in a Confirmed Uptrend. Five markets, including Japan, South Korea and Taiwan, are in an Uptrend Under Pressure. Four markets, including China, are in a Rally Attempt.
  • We upgraded India to a Confirmed Uptrend from a Rally Attempt after the Sensex staged a day-7 follow-through day. Look for the index to rise and hold above its 50- and 200-DMAs to increase conviction. It should form higher lows and higher highs given the last follow-through day in early-January failed.
  • Breadth continues to be narrow. Breakouts and near-pivot stocks remain close to multi-year lows. Foreign Institutional Investors in India also continue to be net sellers.
  • The Indian FY26 Union Budget continued fiscal consolidation, increased capex by 10% and introduced major personal tax reforms. This move aims to reduce the middle-class tax burden and boost consumer spending. Refer to page 14 for stocks of interest in India.
  • Highlighted Focus List Idea: Eicher Motors (ECH.IN; EIM IN). Refer to page 9 for an annotated chart.