nikkei 225 daily outlook thurs 03 dec potential dip towards 19700 support area before recovery 17890
<p>(Click to enlarge chart) What happened earlier The Japan 225 (proxy for the Nikkei 225) has shaped the expected pull-back below the 20050 “acceleration level” […]</p>
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What happened earlier
The Japan 225 (proxy for the Nikkei 225) has shaped the expected pull-back below the 20050 “acceleration level” as market participants await for the key monetary policy decision by the European Central Bank (ECB) later today @1245GMT
Key elements
- Current pull-back in price action is now residing in the “middle” of the sideways range configuration between 20050 and 19700 in place since 19 November 2015.
- The short-term key support remains at 19700 which is also the lower boundary of the medium-term bullish ascending channel in place since 29 September 2015 low.
- The hourly (short-term) Stochastic oscillator has turned down near its overbought region and still has further potential downside before reaching its oversold region. This observation suggests that the current pull-back in price action is not yet over and the Index may see another dip close to the 19700 short-term key support.
Key levels (1 to 3 days)
Pivot (key support): 19700
Resistance: 20050, 20190 & 20450
Next support: 19190 (weekly pivot)
Conclusion
The medium-term bullish trend remains intact but short-term technical elements are still advocating for further potential dip in price action of the Index. As long as the daily (short-term) pivotal support at 19700 holds, the Index is likely to shape a recovery to retest the short-term range top at 20050 before targeting the next resistance at 20190.
However, a break below the 19700 short-term pivotal support is likely to see a deeper pull-back to test the next support at 19190 (weekly pivot).
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