Analyzing the Global Stock Markets – Europe – Asia

On request of a number of our members from Europe and Asia I have compiled a stock market analysis of the key European and Asian stock markets.  Combining this analysis with the US stock market analysis we can take a look at the state of the global markets and make key decisions regarding our plan of approach to trading.

The European & Asian Markets?

Having a good overview of situation the stock markets are in gives us an insight into investor confidence. Markets breaking out of sideways trends into up trends shows us growing confidence especially if the break outcomes with higher volume. When market are moving in sync this also gives us confirmation of the strength of the moves. It is good trading practice to regularly review the overall status of the market in which you invest. It also gives us a strong sense of global perspective when we analyze the major global indexes side by side. Learning to analyze the state of the markets is an important tool in your arsenal.

In this stock market analysis lesson we will cover the following European and Asian stock markets, in part 1 we covered the US markets.

  • London FTSE 100 – FTSE-X
  • Frankfurt DAX Index – FDAC-X
  • Bombay SE Sensex Index – BSESN-X
  • Shanghai Stock Exchange – SSEC-X

Analyzing the European & Asian Stock Markets

My favorite charts include a mix of Price, Moving Averages, Volume, Momentum indicators and Price Volume indicators. Usually one of each is enough. Price Volume indicators allow to to take a glimpse into future changes of trend. For in depth analysis of how to use Price / Volume Divergences to spot future trend changes see our advanced stock market products and services.

TeleChart2007 chart courtesy of Worden Brothers, Inc.

Notes on the Stock Charts

The London FTSE is looking positive having broken above the 200 day moving average and broken out of the 5 month sideways consolidation stretching back to May 2010.  It is currently on course to challenge the April 2010 highs.  The rise of 1.51% yesterday also helped to turn around the RSI indicator, which crossed over its own moving average.

The German DAX has just surpassed its April high and is looking like one of the more bullish European indexes.  This is quite significant as the market has been in a 6 month sideways trend, and this breakout signifies a new support level.

The Indian Sensex has so often in the last 24 month been a leading index, in fact, it has made the most gains of all the major indexes over the last 10 years.  However, the surge ahead seems to be taking a toll on the market participants at the moment, as the SENSEX is facing resistance at it’s current levels.  This is not to suggest the market cannot go higher.  But all markets require to take a break once in a while from breakneck gains.  Watch this closely.

The Shanghai market is seeing a well rounded 6 month bottom forming, one could suggest it is a cup and handle pattern.  In the last 3 days we have seen a very bullish breakout and the next logical stop for this new uptrend would be the April high.

The Market Outlook for Europe and Asia.

We are in the full swing of a new short and medium up trend in most of the major world indexes.  This does not mean we can close our eyes to the possibility of short-term pull backs in the market.  But I believe that the current moves are the foundation for a significant push upwards towards the end of 2010.

Always take care to limit your risk in any trade and only buy high-quality stocks.

Good luck profit hunting.

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