the week ahead for major stock indices 26 oct to 30 oct 2015 1659022015

Key Takeaways

• The initial expected “deeper pull-back/consolidation” scenario has been put on hold/invalidated through the bullish breakout of the respective parallel risk levels seen on the major stock indices; (Nikkei 225 = 18740), (China A50 = 10100), (DAX = 10380), (S&P 500 = 2050/60) and (Hang Seng = challenging 23500/24000).
• Medium-term (1 to 3 weeks) positive feedback loop on market sentiment  remains intact driven by the coordinated “hopes of more monetary stimulus injection” by the European Central Bank (ECB), People’s Bank of China (PBOC) and Bank of Japan (BOJ).
• Based on the Elliot Wave Principal and other technical analysis elements, the Nikkei 225, Hang Seng and S&P 500 are in the midst of undergoing a potential bullish wave 3/ structure with the DAX that is evolving within an extending bullish wave 1/. Despite the current unclear wave structure on the China A50, other technical elements are advocating for a further potential upside movement.
• For the coming week we will have the U.S. Federal Reserve monetary policy announcement on 29 Oct (Thurs) @ 2am Singapore time follow by Bank of Japan monetary policy announcement on 30 Oct (Fri) @11 am Singapore time.

Nikkei 225

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 18760

Pivot (key support): 18400

Resistance: 19190 & 20050/20190

Next support: 17660

Medium-term (1 to 3 weeks) Outlook

A potential minor pull-back is expected for the Japan 225 (proxy for the Nikkei 225) holding above the key support zone at 18760/18400 before another potential rally occurs to target the 20050/20190 resistance.

On the other hand, failure to hold above the 18400 weekly pivotal support is likely to damage the bullish trend place since 15 October 2015 low for a deeper slide towards the next support at 17660.

Hang Seng Index

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 23190

Pivot (key support): 22720

Resistance: 24120 & 25000/25500

Next support: 22260/22180

Medium-term (1 to 3 weeks) Outlook

As long as the 23190/22720 key support zone holds, the Hong Kong 40 Index (proxy for the Hang Seng Index) is likely to shape a further potential rally to target 24120 before 25000/25500.

On the other hand, failure to hold above the 22720 weekly pivotal support is likely to negate the bullish tone to see a slide to retest the pull-back support of the “Double Bottom” bullish breakout at 22260/22180.

FTSE China A50

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 10100

Pivot (key support): 9790

Resistance: 11480/11870

Next support: 9330/8990

Medium-term (1 to 3 weeks) Outlook

The 10100/9790 key support zone is likely to hold any potential minor pull-back for the China A50 Index (proxy for the FTSE China A50) before another round of potential upside movement materialises to target the 11480/11870 resistance zone.

On the other hand, failure to hold above the 9790 weekly pivotal support is likely to negate the bullish tone to see a slide to test the trendline support in place since the “Black Monday”, 24 August 2015 low at 9330/8990.

DAX

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 10640

Pivot (key support): 10480

Resistance: 10830 & 11220

Next support: 10175

Medium-term (1 to 3 weeks) Outlook

The German 30 Index (proxy for the DAX) is likely to shape a minor pull-back at this juncture (below 10830)  towards the 10640 intermediate support with a maximum limit set at the 10480 key weekly pivotal support before another potential upside movement materialises to target the next resistance at 11220.

On the other hand, failure to hold above the 10480 weekly pivotal support is likely to negate the bullish tone to see a deeper slide to test the next support at 10175.

S&P 500

(Click to enlarge charts)

Key Levels (1 to 3 weeks)

Intermediate support: 2060/2044

Pivot (key support): 2018

Resistance: 2128/2138

Next support: 1992

Medium-term (1 to 3 weeks) Outlook

Any potential minor pull-back for the U.S. SP 500 Index (proxy for the S&P 500) is likely to be held by the 2060/2044 intermediate support before another round of potential upside movement occurs to target the significant range top zone in place since 18 May 2015 at 2128/2138.

On the other hand, failure to hold above the 2018 weekly pivotal support is likely to negate the bullish tone to see a deeper slide to retest the lower limit of the pull-back support zone of the “Double Bottom” bullish breakout at 1992

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