nikkei 225 daily outlook 05 jan 2016 further potential push up above 18100 medium term pivotal suppo

(Click to enlarge charts)

Key elements

• The Japan 225 (proxy for the Nikkei 225) has tested and managed to stage the expected recovery right on the 18100 weekly (medium-term) pivotal support in the overnight U.S. session (please click on this link to review the details as per highlighted in our latest weekly technical strategy published yesterday).
• The 18100 is a critical support as it confluences with the trendline support in place since 14 October 2012 low and a Fibonacci cluster.
• The short-term intermediate support a 18300 is defined closely by the 61.8% Fibonacci retracement of the current upmove from 18099 to the current high of 18547
• The hourly (short-term) RSI oscillator has broken above its 50% neutrality and former trendline resistance which suggests that upside momentum remains intact.

Key levels (1 to 3 days)

Intermediate support: 18300

Pivot (key support): 18100

Resistance: 19140

Next support: 17500

Conclusion

As long as the intermediate support at 18300 holds, the Index is now likely to see a further potential push up to retest the 30 December 2015 swing high at 19140.

On the other hand, only a break below the 18100 pivotal support is likely to invalidate the recovery scenario for a further plunge to target the next support at 17500.

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