Nikkei 225 Technical Analysis: Stuck In a Well Defined Range
- Nikkei 225 seems to be poised to test near term support at 15,000
- The index appears to have found some support below the 16,000 handle
- Gains may be corrective within context of the near term down trend
The Nikkei 225 is treading water after spiking down last week on the BoJ’s monetary policy announcement, with the index appearing to have found slight support below the 16,000 handle. The price is trading between the well-defined 18,000 resistance and the 15,000 support, with gains appearing to be corrective in the context of the near term down trend.
The Nikkei seems to be poised to test near term support at 15,000 after moving below interim support-turned resistance at the 16,500 level. A break below the 15,000 level may put the spotlight on the 50% Fib of the long term up trend from 2012 at 14,518. However, a move above 16,500 might expose the 18,000 resistance, with a break above that level signaling that the bulls may have taken control, perhaps implying that the long term uptrend is resuming.
With the Nikkei spiking down hard on the BOJ, it seems as though favorable setups may be lacking from a risk/reward perspective. However, a corrective move higher followed by a well-defined bearish technical setup may offer selling opportunities. With that being said, confirmation is absent for the time being.
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Nikkei 225 Daily Chart: May 4, 2016
--- Written by Oded Shimoni, DailyFX Research
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