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  • The sell-off in the Asian stock markets seems to have stalled, likely due to renewed hopes of US-China trade talks.
  • MSCI’s broadest index of Asia-Pacific shares outside Japan is creating a Doji candle, signaling indecision or bearish exhaustion.

The stock markets in Asia seem to have taken heart from the reports that the US and China could back to the negotiating table very soon.

The news hit the wires yesterday that the Trump administration has reached out to China for a new round of trade talks. The news has indeed raised hopes that two of the biggest economies of the world could reach a deal.

As a result, the sell-off in the MSCI’s broadest index of Asia-Pacific shares outside Japan has stalled. Currently, the index is trading largely unchanged on the day at 508, having hit a 14-month low of 505.61 earlier today.

More importantly, the index is charting a classic doji candle, which is usually considered a sign of indecision in the market place. However, when viewed against the recent slide, the doji represents bearish exhaustion.

Note that tomorrow’s close would become pivotal if the index closes today on a flat note, confirming a doji pattern.

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