nikkei 225 daily outlook fri 20 nov maintain bullish stance tolerate excess for short term pivotal s

(Click to enlarge chart)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has drifted lower into European and U.S. sessions. It has tested 19780 short-term pivotal support before inching up higher.

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

Key elements

• Current price action is now challenging the short-term pivotal support at 19780 but it is now approaching the previous minor swing lows of 17 November @2pm and 18 November @1pm at 19650.
• The hourly (short-term) Stochastic oscillator is now back at its oversold region which suggests another potential upturn in upside momentum.
• The next resistances after 20040 will be at 20300 (1.00 Fibonacci projection) follow by 20700 (upper boundary of the ascending channel, in dark blue in place since 29 September 2015 low + 1.618 Fibonacci projection).

Key levels (1 to 3 days)

Pivot (key support): 19650 (excess)

Resistance: 20040, 20300 & 20700

Next support: 19460 & 19190

Conclusion

Short-term technical elements are still positive, thus we are tolerating the excess for the daily (short-term) pivotal support to 19650 for at least a push up to target the 20040 acceleration level. Only a break above 20040 is likely to see a further potential rally towards the next resistance at 20300 and even 20700 next.

However, failure to hold above the 19650 pivotal support is likely to invalidate the bullish scenario for a further slide towards the lower boundary of the ascending channel in place since 29 September 2015 low at 19460.

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