nikkei 225 daily outlook for tues 26 may 20440 target reached risk of a pull back below 20540 661322
<p>(Click to enlarge chart) Key elements The Japan 225 (proxy for the Nikkei 225) has reached a key Fibonacci projection cluster at 20440/20540. The short-term […]</p>
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Key elements
- The Japan 225 (proxy for the Nikkei 225) has reached a key Fibonacci projection cluster at 20440/20540.
- The short-term Stochastic oscillator still has some room for further downside before reaching its extreme oversold level.
- Since 07 May 2015 low, the Index has evolved within a short-term ascending channel (in orange) with upper (resistance) and lower (support) boundaries at 20850 and 20120/20110 respectively.
- The 20120/20110 support also corresponds closely with the 38.2% Fibonacci retracement or the recent up move from 14 May 2015 low to 25 May 2015 high (a typical wave 4 target based on the Elliot Wave Principle).
- The next significant resistance will be at 20850 which also confluences with multiple Fibonacci projection clusters (please click on this link for more details as per highlighted in our latest weekly outlook).
Key levels
Pivot (key resistance): 20540
Support: 20250 & 20120/20110
Next resistance: 20850
Conclusion
Short-term technical elements have turned negative. As long as the 20540 daily pivotal resistance is not surpassed, the Index is likely to shape a short-term pull-back towards 20250 before 20120/20110.
However, a break above 20540 is likely to invalidate the pull-back scenario for a further squeeze up towards the next resistance at 20850.
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