Nikkei 225 breaks higher on tech gains. Nasdaq 100 next?
Given the driver of the Nikkei’s performance, keep an eye on the Nasdaq’s performance given it continues to bump up against downtrend resistance on an almost daily basis.
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Japan’s Nikkei 225 is threatening to break out of the downtrend it’s been in since June, climbing above 33,000 thanks to gains in technology names on Thursday. And that may have implications for the Nasdaq given the tech-heavy index is continuing to bump up against downtrend resistance.
Nikkei turnaround gathers momentum
The Nikkei was looking susceptible to renewed downside just a few days ago, testing its 50-day MA and upslope support running from August. But having navigated several risk events, the most recent being the US inflation report for August, it’s now taking a second look above the top of its recent trading range. With little sign of reversal intraday, it may have success where it first failed last week.
If we do get a clean break, resistance around 33,330 would be the first target for bulls, where the index stalled last week. Beyond there, 33,500, 33,830 and 34,000 are the levels to watch, the latter marking the multi-decade high set in June. Should the break fail to be sustained, a move back into the range would rule the trade invalid.
Nasdaq to follow suit?
Given the driver of the Nikkei’s performance, keep an eye on the Nasdaq’s performance given it continues to bump up against downtrend resistance on an almost daily basis. If you look hard enough, you may even be able to see an inverse head-and-shoulder forming.
-- Written by David Scutt
Follow David on Twitter @scutty
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