MSCI Taiwan Index is hugely expose to the US Nasdaq tech companies, for example one of them is Apple INC, where its share performance, sales of iPhone, apple watch, iPad products have a direct influence on Taiwan equities market as a whole because companies in Taiwan like Hon Hai and TSMC are direct supplier of electronic component of Apple products.
Taiwan remain a popular tourist attractions where foreign exchange rate will influence the tourism activity, importing of exporting activity, inflationary pressure in Taiwan.
Singaporeans like to travel to Taiwan so i use the foreign exchange rate of SGDTWD as an example and reference illustrating. Current foreign exchange rate scenario rebounds fulfill our classical support target around 22.50 after hitting a low of 21.50 in mid 2017. The strengthening of Taiwan Dollar could be seen as Taiwan economy is strengthening hence hot money inflow to Taiwan equities market, currency and properties market seeking alpha yield. Moving on from here we may see 2 scenarios surrounding the movement of SGDTWD
1) once it reaches 22.50 to 22.75 classical resistance target, it may see a mild correction to form a chart pattern Cup and Handle to test 23.00 to 23.25 second level classical support line.
2) after reaching 23.00 to 23.25 classical support line converging with red color line (support turn resistance) or blue color resistance line, it shows that this currency pair is forming a downtrend with price target at 22.50 to 22.75 (1st level target) and 21.50 (2nd level target recent low) and 20.00 new low.
With global recovery is taking place and picking up steam, Taiwan equities market is no different to global indices where money is pouring into its domestic economy, hot money inflow seeking alpha yields which will see its equities market challenging previous high and creating new all-time high.
Based on TA (Technical Analysis)
1) MSCI Taiwan Index - is forming an ascending triangle chart pattern with reference MSCI Taiwan Index all time high is 453.74 in year 2000, all time low is 152.95 in September 2001 and 146.77 in October 2008. A green big color line rounding bottom is seen couple with black color line Cup and handle chart pattern. Possible target price for MSCI Taiwan Index is 500 level should all time high 453 is break out successfully using red color support line (price channel) as a guide and reference.
2) Taiwan Index TWI - is forming an ascending triangle chart pattern with reference Taiwan Index TWI all time high is 12000 in 1990s and 2560 in 1991s. Possible target price for Taiwan Index TWI is 15000 level should all time high 12000 is break out successfully.
History Chart on Taiwan Index TWI - All time high 12000 in 1990s and all time low 2560 in 1991s
Chart on Taiwan Index TWI - 5 June 2017
Chart on MSCI Taiwan Index - 22 Oct 2017 (Monthly Chart)
Chart on MSCI Taiwan Index - 22 Oct 2017 (Monthly Chart)
Chart on MSCI Taiwan Index - 22 Oct 2017 (Monthly Chart) revised with Technical Analysis
Chart on SGDTWD foreign exchange rate - 26 August 2017
Chart on SGDTWD foreign exchange rate - 26 August 2017 revised with Technical Analysis
Chart on SGDTWD foreign exchange rate - 26 October 2017
Chart on SGDTWD foreign exchange rate - 26 October 2017 revised with Technical Analysis
Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.
No comments:
Post a Comment