JPN 225 Technical Analysis: Correction Prolongs as Momentum Wanes
- Nikkei 225 Strategy: Range trade or stay put as correction prolongs
- 20-day MA at 17,332 caps the topside. Firm support remains at 15,978
- Momentum is poised to reverse down
Thecorrection in JPN 225 continues within range 15,978-17,653. The index is currently topped by 20-day moving average at 17,332, whose break would be a hint for further upside. Momentum seems to wane before it could enter overbought territory. All signs point to further consolidation with possible downside bias emerging.
Overall, the Nikkei index remains range-bound around levels last seen in October 2014, as part of a long descent from its high in November. Long-term traders with short positions could look to take profit at dips or keep a close watch of stop loss.
Range traders may find opportunities pre-empting a downward reversal, taking cue from 20-day MA resistance. Support at 15,978 holds firm on the downside.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh