nikkei 225 daily outlook fri 04 dec short term downside pressure still prevails below 19720 resistan

(Click to enlarge chart) What happened yesteday The Japan 225 (proxy for the Nikkei 225) has plunged overnight and broke below the 19700 short-term pivotal […]

(Click to enlarge chart)

What happened yesteday

The Japan 225 (proxy for the Nikkei 225) has plunged overnight and broke below the 19700 short-term pivotal support and invalidated our bullish expectation.

The risk off scenario seen in the equities space is triggered by the European Central Bank (ECB)’s lacklustre monetary easing policies.

Key elements

Price action has broken below the lower boundary of the medium-term ascending channel in place since 29 September 2015 low now turns pull-back resistance at 19720.
The 19720 resistance also confluences with the former horizontal support linking the swing lows of 20 November 2015 @8am and 30 November 2015 @11am and also the 50% Fibonacci retracement of yesterday’s overnight steep down move from 03 December 2015 high @8pm to today’s current low of 19423.
The next support rests at the 19190 level which is the key weekly pivotal support.

Key levels (1 to 3 days)

Pivot (key resistance): 19720

Support: 19190

Next resistance: 20050

Conclusion

Short-term technical elements have turned bearish. As long as the 19720 daily (short-term) pivotal resistance is not surpassed, the Index is likely to face further downside pressure to test the 19190 weekly pivotal support.

Only a move back above the 19720 level may negate the bearish tone to see a push back up towards the 20050 range top.

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