Short-term technical outlook on Nikkei/Japan 225 Index (Thurs 18 Apr)
click to enlarge charts
Key technical elements
- The recent rally 3.7% seen in the Japan 225 (proxy for Nikkei 225) from its 10 Apr 2019 low of 21550 has hit a minor ascending channel resistance at 22350 and broke below yesterday 17 Apr Asian session low of 22185.
- Short-term momentum reading has turned negative as the 4-hour Stochastic oscillator has inched downwards after a prior bearish divergence signal at its extreme overbought level.
- The next significant support rests at 21970/21880 which is defined by the lower boundary of minor ascending channel from 25 Mar 2019 low, 23.6% Fibonacci retracement of the recent up move from 25 Mar 2019 low to 17 Apr 2019 high & the medium-term pivotal support as per highlighted in our weekly technical outlook report published on Mon; click here for a recap.
Key Levels (1 to 3 days)
Intermediate resistance: 22230
Pivot (key resistance): 22350
Next resistance: 22880
Given that the 1-hour Stochastic oscillator has reached an extreme oversold level, the Index may shape a bounce first toward the 22230 intermediate resistance with a maximum limit set at the 22350 key short-term pivotal resistance. Thereafter, another round of potential push down to target the 21970/21880 support in order to complete the minor pull-back phase.
On the other hand, an hourly close above 22350 invalidates the further pull-back scenario for a continuation of the up move towards the next resistance at 22880 (16 Oct/03 Dec2018 medium-term swing high area).
Charts are from City Index Advantage TraderPro
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.