nikkei 225 daily outlook fri 15 jan 2016 potential push up above 17270 support 1793342016

(Click to enlarge charts)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225)has drifted down and almost hit the long-term key support at 16900 (printed a low of 16930) in the Asian session. Thereafter, it has managed to reverse to the upside and broke above 17270 short-term upper neutrality zone in the U.S. session.

Please click on this link for a recap on our previous short-term daily outlook/strategy.

Key elements

• The Index has broken above the 17270 upper neutrality zone as per highlighted in our daily outlook/strategy yesterday. Thus, price action has validated a potential push up for the Index.
• The Index is now being supported by a short-term trendline in place since yesterday low of 16930 now at 17270.
• The next immediate short-term resistance stands at 17700 which is defined by 13 January 2015 swing high area and the 23.6% Fibonacci retracement of the current down move from 18 December 2015 high to yesterday’s low of 16930.
• The hourly (short-term) Stochastic oscillator is now at its oversold region which suggests a potential upturn in the price action of the Index.

Key levels (1 to 3 days)

Pivot (key support): 17270

Resistance: 17700

Next support: 16900 (long-term)

Conclusion

As long as the 17270 short-term pivotal at 17270 holds, the Index is likely to see a potential push up to target the minor swing high area of 17700.

On the other hand, a break below 17270 may see another round of choppy price action to retest the 16900 key long-term support.

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