nikkei 225 potential recovery in progress 1823142016
<p>Daily Outlook, Wed 27 July 2016 (Click to enlarge charts) What happened earlier/yesterday The Japan 225 Index (proxy for the Nikkei 225 futures) has managed […]</p>
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Daily Outlook, Wed 27 July 2016
What happened earlier/yesterday
The Japan 225 Index (proxy for the Nikkei 225 futures) has managed to stage the expected recovery right above our predefined medium-term pivotal support at 16200. In this morning Asian session (27 July), it has almost met our short-term upside target/resistance of 16730 (printed an intraday high of 16658).
Please click on this link for a recap on our previous daily short-term technical outlook/strategy.
Key elements
- The Index has managed to recapture the former short-term congestion support level of 16440 and managed to form an hourly bullish “Marubozu” candlestick in the first opening hour of today’s Asian session. Thus, 16440 will be the key short-term support for today.
- The Index is now attempting to stage a breakout above the short-term descending trendline in place since 21 July 2016 high which is also just below the 25 July 2016 minor swing high area of 16730.
- The 4 hour Stochastic oscillator remains in a bullish dynamic and it still has room to manoeuvre to the upside before reaching an extreme overbought level. These observation suggest that upside momentum of price action remains intact.
Key levels (1 to 3 days)
Pivot (key support): 16440
Resistances: 16730 & 17100/240
Next support: 16200 (medium-term pivot).
Conclusion
Recovery in progress. We have tightened the short-term pivotal support to 16440 and a break above 16730 is likely to add impetus for a further potential rally to target the next resistance at 17100/240 in the first step.
On the other hand, failure to hold above the 16440 short-term pivotal support may invalidate the preferred direct rise scenario for another round of pull-back to test the 16200 medium-term pivotal support.
Disclaimer
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