Talking Points:
- Nikkei 225 Strategy: Cautious of tough resistance despite upside momentum
- Resistance level 17,653 coincides with 20-day MA at 17,629
- Failure to breach will keep the index in correction
JPN 225 display a strong upside bias similar to regional stock indices. However a resistance level at 17,653 coincides with 20-day moving average at 17,629, making it a tough level to break through. Failure here could lead to a downward reversal.
Range traders should keep stops nearby resistance level in case the index breaks out of range on the topside. Generally, it is in a corrective period with no concrete uptrend signal. Long-term traders may wait to buy the dips at a retest of support level, or alternatively after a clean break of 20-day MA.
Support remains at 15,978, also lower bound of corrective range.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
