Talking Points:
- Strategy: Close long position or keep stop tight to support levels
- Support and downside levels: 16,525.5; 15,848; 15,523
- Downward momentum affirms this directional development
The rally in Nikkei 225 has come to an end and downward reversal commenced, even after a break of 38.2% Fibonacci at 16,831.1. Levels to watch on the downside include: immediate support at 16,525.5; 15,848 support; 15,523; and 14,963 firm support.
Traders with long positions may consider closing them to take profit. Those decide to maintain position should keep their stops tight, trailing every support level on the way down - depending on your risk tolerance.
Downward momentum signals are building up, a clear sign of upcoming development. Until this changes, Nikkei index will continue to retrace last week’s levels on its decline.
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Daily Chart - Created Using FXCM Marketscope
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
