Nikkei 225 Technical Analysis: Downtrend Resumes ahead of 23.6% Fibo
- Nikkei 225 Strategy: More shorts in favor at any break of 23.6% Fibonacci
- Immediate support is 23.6% Fibonacci at 17,847 after break of 18,000
- Stops may trail 5-day moving average
Nikkei 225 fell past 18,000 to test 23.6% Fibonacci at 17,847. Downtrend signal has resumed in moving averages after a correction period during late December. More short positions could be considered at any break of the Fibonacci.
Trend traders currently with short positions may keep their stops trailing 5-day moving average at 18,275 as downward signal gathers force. Any failure to break the Fibo at early attempts would not rule it out altogether, as market forces play out around technical level.
With only weak support levels below the Fibo, further downside movement could enter a rather easy passage into August-October consolidation region.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh