HONG KONG, NOV 12: Funds flowing back into equities after a millennium-induced lull around January 1 are forecast to push most Asian markets to new cyclical highs in late January, an SG Securities chartist said."I anticipate that the liquidity will come in January and provide us with what I consider to be a blow off top type of move," SG Securities global technical research head Tom Schroeder told Reuters in an interview on Friday. "It may last into February, but my base case scenario is that it will be over by the end of January." This big post-New Year rally could be extended through the first quarter, Schroeder said. Markets then were likely to consolidate for the remainder of the year. "I would give it the first quarter to build the market topping pattern, but I think after March you are going to see a pretty strong downside bias in global equity markets," he said."Hong Kong, Singapore and Japan, those are the three markets that are giving me the lead move," he said. "I have Japan shooting foraround 19,800-20,000 in the same time frame," Schroeder said, referring to Tokyo's benchmark Nikkei 225 in the first quarter of the year.The Nikkei chart pattern was more complex than others in the region and suggested a shorter term trading strategy would be better post-January, he said."I would sell at 20,000. We should see at least a three to six-month consolidation pattern rolling through later, but whether that is a flat pattern or a very steep decline is difficult to say at this point," Schroeder added. Hong Kong's Hang Seng Index had started its rally last week, breaking out from its wedge or triangle formation, and was next set to test 14,900 with more upside to 16,400 possible by the end of January.The forecast big move was clear on the Hang Seng's weekly chart, he said. "We should be able to move to above 15,000. That would open the way for a test of 15,500-15,600 and my macro projection of 16,400," Schroeder said. "Taiwan is one of the markets that has been a laggard and will probably peakat a later stage. I am still very bullish Taiwan until around the middle of 2000," he said.Taiwan's Weighted Average Index or TAIEX chart looked positive over the medium to longer term, he said. "We may see some short risks around the 7,000 level, but I am recommending that investors start to selectively buy it at 7,200 to 7,400 with a long-term target of 9,000 and longer term target of 11,000," Schroeder said.India was also a cyclical markets showing some of the same signs as Taiwan, as was South Korea. "It (South Korea) has potential but it has outperformed so much that I cannot see it outperforming again from this stage." Thailand's benchmark composite SET Index was also a laggard but upside there was probably limited and 500 was a pivotal point. ``After this January-February period, it will face problems. I have a macro target of 680 SET, assuming that we are able to breach and surpass the 500 level,'' Schroeder said.``If we fail to get through the 500 level in January period, I would begin toget a little concerned,'' he said.
