nikkei 225 daily outlook for fri 17 july bullish tone has resurfaced above 2054020430 support 853342
<p>(Click to enlarge chart) What happened earlier The Japan 225 (proxy for the Nikkei 225) has rallied and broke above the 20570 daily pivotal resistance. […]</p>
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What happened earlier
The Japan 225 (proxy for the Nikkei 225) has rallied and broke above the 20570 daily pivotal resistance. The expected short-term setback scenario has been invalidated.
Please click on this link for a recap on our previous daily outlook.
Key elements
- Latest price action has broken above the former short-term trendline resistance joining the highs since 24 June 2015 now turns pull-back support (in dotted green) at 20540.
- Since 10 July 2015 low @4am, the Index has evolved within a short-term ascending channel (as highlighted in dark blue) with upper (resistance) and lower (support) boundaries at 20850/20960 and 20540 respectively.
- The 20850/20960 short-term channel resistance also confluences with the 24 June 2015 siwng high and the 1.618 Fibonacci projection from 09 July 2015 low @8am to 10 July 2015 low @4am (a typical bullish wave iii target based on the Elliot Wave Principal).
- The hourly Stochastic oscillator has reached its extreme overbought level which highlights the risk of a short-term pull-back in price action.
Key levels
Intermediate support: 20540
Pivot (key support): 20430
Resistance: 20850/20960
Next support: 20075/20040
Conclusion
Technical elements have indicated that the Index is unlikely to see any short-term setback at the moment and its medium term (multi-week) upside movement is likely to resume.
Any potential pull-back now is likely to be held by its significant short-term support at 20540/20430 for a direct potential rise towards the 20850/20960 resistance which is also the weekly upside target (please click on this link for more details).
However, failure to hold above the 20430 daily pivotal support is likely to jeopardise the bullish tone to see a deeper slide to test the next support at 20075/20040.
Disclaimer
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