The Shanghai Composite Index is technically in bear-market territory, but it looks really more like a severe correction at this stage, according to the charts, technical analyst Daryl Guppy, CEO of Guppytraders.com, said Thursday.
"What we are looking for is strong support to develop between 2400 (and) 2600 and a rebound from that level," he said.
A rebound from the 2600 level, prior to China's national day holidays, would be the index's most bullish outcome, Guppy added.
Looking to Hong Kong, the "key factor of the Hang Seng Index is that we have broken below (a) trend line," Guppy said. "This also happened with the Shanghai Index."
Investors need to see a consolidation between 19,000 and 21,000, he said. Falling below the 19000 level would be very bearish, setting a downside target of 17500.
As for thef the Bombay Sensex in the short-term, Guppy said the consolidation level of the stock should take place between 14,080 and 15,080.
"What we are going to do is test the bottom of this consolidation level and we are looking for a rebound away from it," Guppy said. "Failure to hold that bottom level sets a downside target of about 13,600."
http://www.cnbc.com/id/32667868
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