INDEX BRIEFS – TAIEX, TAIWAN by DARYL GUPPY

Eight weeks ago we said the key figure for the Taiwan index is 7400. This is the long term historical support level and it will act as a resistance level. The market did move above this level but it is now developing a consolidation pattern. The lower long term resistance near 6700 has been overcome and this area will provide support if the market retreats strongly from the lower edge of the consolidation area near 7300. The upside target for a sustained breakout above 7400 is near 8100.



On the daily chart the long term GMMA is well separated and shows good investor support for the developing trend. It has shown relatively little compression as the index retreat developed in early July and again in early August. There is some strong trading activity but it uses the long term GMMA as a support level.

The strength of the trend is shown by the good separation in the long term GMMA. Trend strength has been confirmed as the upper edge of the long term GMMA moves above 7300. A lower edge move above 7100 is confirmation of trend stability and sustainability.

The rapid rise of the trend has stabilised and traders can look for regular rally and retreat behaviour within the context of the longer term uptrend. This is a strong market, but a rapid retreat to support near 7100 is possible.

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Article contributed by Private Trader, Market Expert, Trading Coach and Best-Selling Author Mr. Daryl Guppy. For more articles and commentaries from Daryl Guppy, click HERE.