Nikkei 225: Wait out the Range-Bound Consolidation
- Strategy: Wait out the consolidation or position for an eventual break out
- Chances are even for a break of support at 16525.5 or resistance at 17438.5
- Momentum signals are in lackluster
Nikkei 225 remains trapped in a range between a support level at 16525.5 and a resistance level at 17438.5. Investors could wait out the consolidation, or position for an eventual break out of range. Outside of these bounds, support level comes at 15523 and resistance level comes at 18045.8.
Chances for a break out at either boundary look even at present, as momentumstays flat. A break of support and the ensuing downward reversal would offer opportunities for short positions toward the recent bottom at 14963. Whereas a break of resistance would open up the topside region for a retracement up to November’s high. Given the uncertainty in future direction, stop loss should be exercised with caution.
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--- Written by Nathalie Huynh, Strategist for DailyFX.com
Contact and follow Nathalie on Twitter: @nathuynh
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.