Featured Trade Nikkei 225 retreated from key range top

Short-term technical outlook on Nikkei 225/ Japan 225 Index (Fri 29 Mar)

Key technical elements

• Yesterday’s pushed up in price action of the Japan 225 Index (proxy for the Nikkei 225 futures) reinforced by the better than expected China manufacturing PMI data print for Mar has stalled just a whisker below the 21880 key medium-term pivotal resistance as per highlighted in our latest weekly technical outlook report (click here for a recap).
• It printed an intraday high of 21759 in today, Asian session before it shed a loss of 1.05% to print a current intraday low of 21569. The 21759 high confluences with the 1.00 Fibonacci expansion of the push up from 08 Mar 2019 low to 19 Mar 2019 high projected from 25 Mar 2019 low).
• Momentum indicators have started to show revival of short-term downside momentum of price action where both the 4-hour/1-hour Stochastic and RSI oscillators have flashed bearish divergence signals at their respective overbought regions.
• The next significant near-term supports rests at 21300 and 21170 (yesterday, Asian session opening gapped up & the minor ascending trendline from 25 Mar 2019 low).

Key Levels (1 to 3 days)

Intermediate resistance: 21650

Pivot (key resistance): 21750

Supports: 21300 & 21170

Next resistance: 21880 (key medium-term pivot)

Conclusion

If the 21750 key short-term pivotal resistance is not surpassed, the Index is likely to shape another round of potential push down to target the next near-term supports at 21300 and 21170 in the first step.

However, a break above 21750 negates the bearish tone for a push up to retest the 21880 key medium-term pivotal resistance.