nikkei 225 weekly outlook for 23 feb to 27 feb limited upside potential watch the 19190 resistance 2

What happened last week

The Japan 225 (proxy for the Nikkei 225) has rallied towards our expected target at 18300/18600. Please click on this link for more details on our previous weekly outlook.

Key elements

• Current price action is at the 18300/18600 significant neckline resistance of the long-term bullish impending “Double Bottom” configuration (see monthly chart).
• The 18300/18600 resistance also confluences with multiple Fibonacci projections from various degrees (see daily & 4 hour charts).
• The intermediate and short-term Stochastic oscillators have reached their “extreme” overbought levels (see daily & 4 hour charts).
• The pull-back support of the “contracting range” configuration is now at 17780 (see daily chart).
• The 100-day Moving Average is coming to act as a support at 17780 (see daily chart).
• The 18070 and 17780 supports also corresponds with the 23.6% and 38.2% Fibonacci retracement from 13 February 2015 low to 20 February 2015 high respectively (see 4 hour chart).
• The 19190 level is a Fibonacci projection.

Key levels (1 to 3 weeks)

Intermediate resistance: 18600

Pivot (key resistance): 19190

Support: 18070 & 17780

Next resistance: 19820

Conclusion

The Japan 225 Index is now coming close to a key resistance at 18600 and other technical elements are advocating limited upside potential at the moment. As long as the 19190 weekly pivotal resistance (possible excess above 18600) is not surpassed, the Index is likely to stage a decline towards 18070 before 17780.  

However, a clearance above 19190 may see the continuation of the multi-month bullish trend to propel the Index higher towards the next resistance at 19820.

Charts are from City Index Advantage Trader & eSignal

Disclaimer

The information contained in this material is intended for general circulation only.  It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs.  Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.  All queries regarding the contents of this material are to be directed to City Index Asia Pte Ltd.