nikkei 225 daily outlook fri 09 oct bullish trend remains intact above 18015 support 1523512015

(Click to enlarge chart)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has inched slightly lower but still managed to hold above the 17980 daily pivotal support as expected.

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

Key elements

• The Index has managed to bounce higher from the 17980 daily pivotal during the U.S.s session. Current price action continues to evolve within an ascending channel (in orange) in place since the 29 September 2015 low.
• The upper limit (resistance) of the ascending channel stands at 18960 which confluences with the 0.618 Fibonacci projection from 29 September 2015 low @1pm to 08 October 2015 low @3pm. This Fibonacci projection level gives the standard 5^th wave target of the current bullish impulsive wave structure (Elliot Wave Principle) in place since  29 September 2015 low.
• The hourly (short-term) RSI remains bullish above its support and the 50% neutrality level. In addition, it still has room for further potential upside before reaching its extreme overbought level. This observation suggests that a revival in upside momentum which adds credence for a further upside movement in price action.

Key levels (1 to 3 days)

Pivot (key support): 18015

Resistance: 18425, 18470 & 18960

Next support: 17750 (weekly pivot)

Conclusion

We adjust the daily (short-term) pivotal support to 18015 to reflect the current minor “higher low” in price action seen on 29 September 2015 @1pm. As long as the 18015 pivotal support holds, the Index is likely to see a further potential upleg to retest the 07 October 2015 high at 18425 before 18740 and even the upper limit of the ascending channel/5^th wave target, 0.618 Fibonacci projection at 18960.

However, failure to hold above the 18015 pivotal support may negate the bullish tone to see a further slide to test the 17750 weekly pivotal support (pull-back support of the “Descending Wedge” bullish breakout and the lower limit of the ascending channel.

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