Nikkei 225 Reverses down toward 16,000
- Strategy: Keep watch of the 16,000 support level
- Momentum has reversed, leaving the Nikkei vulnerable on the downside
- 16,000 is now an immediate support level, with resistance level around 17000
A week-long rally inthe Nikkei 225 failed to repeat March’s high and the 50% Fibonacci at 17,438.5, leading to a downward reversal toward the 16,000 mark. If the index breaks below this level, it will face another firm support level at 15,523.
Investors with short positions may stay put while the Nikkei is retracing downward and adjust stop loss accordingly. Those who look to trade in the medium-term horizon, either sell or buy, may consider to wait for price action to play out around the 16,000 level first before taking action. Momentum has turned to the downside and a contest of the level seems likely.
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Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Strategist for DailyFX.com
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