nikkei 225 daily outlook for wed 19 aug further potential slide towards multi month range support at

(Click to enlarge chart) What happened yesterday The Japan 225 (proxy for the Nikkei 225) has broken below the 20470 daily pivotal support and our […]

(Click to enlarge chart)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has broken below the 20470 daily pivotal support and our bullish expectation for a push up scenario has been invalidated.

Please click on this link for a recap on our previous daily outlook.

Key elements

The Index continues to evolve within a sideways range configuration since 23 June 2015 with upper (resistance) and lower (support) boundaries at 20850/20960 and 20080/20050 respectively.
The hourly Stochastic oscillator is coming close to its extreme oversold region which highlights the risk of a short-term rebound in price action of the Index.

Key levels

Intermediate resistance: 20380

Pivot (key resistance): 20470

Support: 20080/20050

Next resistance: 20680 & 20850/20960

Conclusion

Short-term technical elements suggest a potential short-term rebound towards the intermediate resistance at 20380 before another round of slide to test the lower boundary of the 3-month sideways range configuration at 20080/20050.

On the other hand, a clearance above the 20470 daily pivotal resistance is likely to negate the bearish tone for a further push up towards 20680 in first step.

Disclaimer

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