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 holding above its 200-DMA support. We recommend a selective approach. Look for markets to rise and hold above their 50-DMA. Focus on stocks holding above key moving averages that are near recent pivots with rising relative strength.
  • Singapore is in a Confirmed Uptrend. Six markets, including China, Hong Kong and Japan, are in an Uptrend Under Pressure. Six markets, including India and South Korea, are in a Rally Attempt.
  • India’s Sensex is testing key support along its 200-DMA. Small- and mid-cap indices are holding up well relatively. The Q3 earnings season and FY26 Budget in early February are the key upcoming market catalysts.
  • Technology, Health Care and Retail are in the top-right quadrant (Outperforming and Improving) of the sector rotation chart for India. Refer to page 10 for a list of constructive leaders with rising relative strength in India.
  • Highlighted Focus List Idea: Affle (AFL.IN; AFFLE IN).

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) breached its 100-DMA support and the next support is along its 200-DMA. We recommend a selective approach. Wait for markets in a Rally Attempt to follow through before increasing risk. Focus on stocks that are emerging out of sound bases with rising relative strength.
  • Australia and Singapore are in a Confirmed Uptrend. Six markets, including China, Hong Kong, and Japan, are in an Uptrend Under Pressure. Four markets, including India, are in a Rally Attempt. The Philippines is in a Downtrend.
  • The Bank of Japan is set to announce its interest rate decision on Thursday after the U.S. Fed’s interest rate decision on Wednesday. The BOJ indicated that another interest rate hike is likely in the near term as economic data have come in in line with expectations. Consensus expects the Bank of Japan to keep the interest rate unchanged at 0.25%.
  • Japan’s Nikkei 225 has been consolidating above key moving averages since the end of September and faces resistance around 40,000. Japan’s Nikkei 225 has risen 17.6% year to date and has been the second-best leading APAC market in 2024.
  • Large-cap stocks in Japan lead other market-cap categories based on the median RS Rating in Japan. The median RS Rating across sectors has improved greatly over the last four weeks. Technology followed by Consumer Cyclical leads the other sectors based on median RS Rating. Refer to page 12 for a list of stocks in Japan that are constructive near pivot setups with a good technical profile.
  • Highlighted Focus List Idea: Fast Retailing (RETA.JP; 9983 JP).

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) briefly traded above its 50-DMA but failed to hold above it. We recommend a selective approach. Focus on stocks that are emerging out of sound bases with a rising relative strength.
  • Australia and Singapore are in a Confirmed Uptrend. Six markets, including China, Hong Kong, and Japan, are in an Uptrend Under Pressure. Four markets, including India, are in a Rally Attempt. South Korea is in a Downtrend.
  • China’s Politburo meeting on Monday signaled a significant shift in its monetary policy stance, which was changed to “appropriately loose” from “stable”. The outcome of the meeting will be announced tomorrow (Thursday). We will look for China and Hong Kong indices to rise and hold above their 50-DMA to turn more constructive.
  • China has held up relatively well compared with Hong Kong during the recent pullback. Additionally, the pullback in China was relatively short-lived. The drawdown of the Hong Kong and China indices was similar to the results of our historical study.
  • There has been a noticeable improvement in RS Rating across sectors in HK over the past four weeks. Technology, Retail, and Financial are some of the notable sectors that are outperforming. Refer to page 14 for a watchlist of stocks from Hong Kong that are trading closer to pivot or entry points.
  • Highlighted Focus List Idea: Trip.com (TRCG.HK; 9961 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) closed slightly above its 100-DMA and is 9% off highs. We recommend a selective approach. Wait for markets in a Rally Attempt to follow-through before increasing risk. Focus on stocks that are emerging from sound bases with rising relative strength.
  • Three markets, including Australia, are in a Confirmed Uptrend. Five markets, including China, Hong Kong and Japan, are in an Uptrend Under Pressure. Four markets, including India and South Korea, are in a Rally Attempt. Indonesia is in a Downtrend.
  • We looked at the impact of Trump’s tariff announcements on the stock market during his first term as president. The MSCI Emerging Markets Asia index (EEMA) declined in the initial months post the tariff announcements in March 2018, and was volatile until the end of 2019. During this period the U.S. Dollar Index rose, but U.S. markets were also volatile. Currently, the U.S. Dollar Index is rising and is at a key resistance level.
  • Australia is one of the leading APAC markets over the last four to 52 weeks. The ASX index has been in a Confirmed Uptrend / Uptrend Under Pressure since Dec 2023. The outperformance was led by the Financial sector which constitutes ~32% of the index. Large cap Basic Material stocks continue to trade below their 200-DMA.
  • Large caps lead in Australia based on median 3-month RS Rating. Technology, followed by Capital Equipment and Health Care, leads other sectors based on median 3-month RS Rating. Refer to page 11 for a watchlist of stocks in Australia.
  • Highlighted Focus List Idea: QBE Insurance (QBE.AU; BE AU).

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 below its 100-DMA resistance. We recommend a selective approach. Focus on stocks that are holding above key moving averages with rising relative strength.
  • Three markets, including Australia, are in a Confirmed Uptrend. Five markets, including China, Hong Kong and Japan, are in an Uptrend Under Pressure. Five markets, including India and South Korea, are in a Rally Attempt.
  • India’s Sensex 30 found support near its 200-DMA and retook its short-term moving averages. Look for a follow-through day to turn constructive. Recent Maharashtra state election results and rebalancing of the MSCI EM Index are some of the recent tailwinds.
  • Alternatively, living below its 50-DMA or a break below the 200-DMA would make the Sensex vulnerable to further downside. Corporate earnings growth has decelerated in recent quarters and Foreign Institutional Investors continued to be net sellers in November.
  • Leaders in India have held up relatively well which is positive and encouraging. Technology and Health Care are in the top-right quadrant of sector rotation, while Financial is improving. Refer to page 9 for a list of watchlist ideas in India.
  • Highlighted Focus List Idea: PB Fintech (PB2.IN; POLICYBZ IN).

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) breached its 100-DMA support for the first time since mid-September. We recommend a selective approach. Look for markets to settle near logical support levels and avoid further clustering of distribution days. Focus on stocks that are holding above key moving averages with rising relative strength.
  • Singapore is in a Confirmed Uptrend. Seven markets, including China, Hong Kong and Japan, are in an Uptrend Under Pressure. Three markets, including South Korea, are in a Rally Attempt. India and Indonesia are in a Downtrend.
  • In the APAC sector rotation chart, Capital Equipment entered the top right quadrant (outperforming and improving) in early-November, alongside Technology. Nvidia’s results, due after the market close today, will be a key catalyst for AI-related Capital Equipment stocks. Refer to page 9 for a watchlist of Capital Equipment stocks that are constructive leaders.
  • Emerging markets performance and U.S. Dollar performance tend to be negatively correlated. Currently the U.S. Dollar is strengthening, which coincides with the pullback in EEMA. Markets anticipate that Donald Trump will impose higher tariffs on imports to encourage production in the U.S. This is expected to result in a higher inflationary environment, which has been anticipated by a rise in yields and U.S. dollar appreciation.
  • Singapore, followed by Thailand, are clear outliers in the Southeast Asian region. Indonesia, Malaysia and the Philippines were downgraded in the last two weeks. Singapore is at multi-year highs following reform announcements in equity markets, while Thailand, driven by stimulus measures, is consolidating near recent highs. Refer to page 13 for a list of constructive leaders in Southeast Asian markets.

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) breached its 50-DMA support for the first time since mid-September. We recommend a selective approach. Look for markets to settle near logical support levels and avoid further clustering of distribution days.
  • Three markets, including China and Taiwan, are in a Confirmed Uptrend. Six markets, including Hong Kong and Japan, are in an Uptrend Under Pressure. Three markets, including India and South Korea, are in a Downtrend. Indonesia is in a Rally Attempt.
  • Hong Kong was shifted to an Uptrend Under Pressure after it undercut October lows. China’s CSI 300 is holding up relatively better above its 21-DMA. China announced additional stimulus measures to address local government debt issues. There were no stimulus measures aimed at consumers, disappointing the market.
  • Technology is in the top-right quadrant of the APAC sector rotation chart, and stands out as a sector in Hong Kong and China. We also notice pockets of strength in India, Japan and Taiwan within Technology. Focus on leading Technology groups in specific markets.
  • Within Technology, Elec-Misc Products, Electronic Parts and Computer-Tech Services are some of the leading industry groups across APAC. Refer to page 16 for a list of Technology ideas across APAC that are trading near entry points.
  • Highlighted Focus List Idea: Lotes (LTS.TW; 3533 TT).

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 50-DMA support ($76; -2%) and reclaimed its 21-DMA. Chinese markets have found support along their 21-DMAs. Other major markets continue to trade below multiple resistance levels. Maintain a selective approach and focus on stocks breaking out or those forming the right side of bases, with rising relative strength.
  • Three markets, including China and Hong Kong, are in a Confirmed Uptrend. Nine markets, including Japan and South Korea, are in an Uptrend Under Pressure. India is in a Downtrend.
  • We shifted India back to a Downtrend from a Rally Attempt after the Sensex undercut its October 25 low. The index has traded below the 100-DMA only twice since April 2023, and must quickly retake its 100-DMA resistance. Living below the 100-DMA or breaking the 200-DMA support would imply further downside risk. Currently, there are 17 Indian stocks on the Focus List. This is the lowest level since March 2023. Over the last month, our Focus List weighting has shifted to China from India.
  • Hong Kong’s Hang Seng index is consolidating around its 21-DMA since pulling back from its October highs. The index has remained constructive after holding the 21-DMA. Overall breath is strong, with 72% of stocks trading above their key moving averages. The outcome of China‘s NPC Standing Committee meeting on Friday could act as a near-term catalyst for the market.
  • Highlighted Focus List Idea: Giant Biogene (GIBH.HK; 2367 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 consolidating below its 21-DMA resistance. Chinese markets are pulling back to their 21-DMAs. Continue a selective approach in markets where indices are struggling near their 50- or 200-DMAs. Focus on stocks breaking out or those forming the right side of bases with rising relative strength.
  • Five markets, including China, Hong Kong and Taiwan, are in a Confirmed Uptrend. Seven markets, including Japan and South Korea, are in an Uptrend Under Pressure. India was shifted to a Rally Attempt from a Downtrend.
  • Japanese indices have been range bound near key moving averages. Japan’s ruling Liberal Democratic Party (LDP) failed to retain a majority in lower house elections. This could deter the BOJ from raising interest rates in the near term. The Technology, Retail and Health Care sectors are leading in Japan based on median RS Rating.
  • India’s Sensex continues to trade below its 100-DMA. Health Care and Technology are notable sectors that are outperforming.
  • Hong Kong’s Hang Seng remains constructive near its rising 21-DMA. Focus on stocks with rising Relative Strength that have not pulled back significantly from recent highs. Refer to page 9 for a list of leaders in Hong Kong that are the most constructive.
  • Highlighted Focus List Idea: Trip.com (TRCG.HK; 9961 HK).

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 a multi-year high and is consolidating near its 21-DMA support. Continue a selective approach in markets where indices are struggling near 50- or 200-DMAs. Focus on stocks breaking out or those forming the right side of bases, with rising relative strength.
  • Seven markets, including Hong Kong and China, are in a Confirmed Uptrend. Five markets, including Japan and South Korea, are in an Uptrend Under Pressure. India is in a Downtrend.
  • We downgraded India to a Downtrend from an Uptrend Under Pressure. The Sensex, and key small- and mid-cap indices, breached 100-DMA support for the first time since June. We need to see a quick retake of the 100-DMA of these indices, or we will turn more cautious on India.
  • Lower than expected Q2 results so far for the majority of the stocks, and foreign institutional investors (FII) selling, have led to a pullback in India. FIIs have sold ~$10B so far in October, which is higher than the $7.9B sold during the Covid pandemic in March 2020.
  • Near-term breadth in India, measured by the percentage of stocks trading above their 50-DMA, has declined sharply over the last four weeks across all market cap categories. By sector, Health Care outperformed based on the median 3-month RS Rating, and is holding up well. Refer to page 10 for a list of stocks in India that are holding above key support levels and remain constructive.
  • Highlighted Focus List Idea: Giant Biogene (GIBH.HK; 2367 HK).