nikkei 225 daily outlook tues 31 may 2016 coming close to 17300 turn neutral first 1813582016
<p>(Click to enlarge charts) What happened earlier/yesterday The Japan 225 Index (proxy for the Nikkei 225 futures) has continued to rally as expected after retest […]</p>
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What happened earlier/yesterday
The Japan 225 Index (proxy for the Nikkei 225 futures) has continued to rally as expected after retest on the pull-back support at 16740 of the bullish breakout of the former short-term “symmetrical triangle” range.
Key elements
- The Index is now fast approaching the first medium-term upside target (resistance) at 17300 which is defined by a Fibonacci projection and now the upper boundary of a short-term ascending channel in place since 24 May 2016 low @1pm (see 1 hour chart) (Please click here to recap our latest weekly technical outlook/strategy published yesterday).
- The hourly (short-term) Stochastic oscillator has reached an extreme overbought level which suggests limited upside potential.
- The near-term support rests at 16990 which is defined by the current intraday low and close to the lower boundary of the short-term ascending channel.
Key levels (1 to 3 days)
Resistances: 17300 & 17710
Supports: 16990 & 16740 (weekly pivot)
Conclusion
The Index is now coming close to the first medium-term target (resistance) at 17300 with mixed technical elements. We turn neutral in short-term for now and watch the 17300 and 16990 levels. A break below 16990 is likely to see a dip towards the 16740 medium-term pivotal support set for this week.
On the other hand, a break above the 17300 level is likely to propel the Index higher towards 17710 (the swing high area of 22 April 2016).
Disclaimer
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