nikkei 225 daily outlook thurs 05 nov 19190 remains the potential upside trigger level 1724342015

(Click to enlarge chart)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has continued to trade sideways between the short-term range top at 19190 and the pivotal support of 18930

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

Key elements

• Current price action is now coming close again to test the 19190 range top in place since 24 October 2015 high. On the positive side, price action is not showing any signs of exhaustion through candlestick patterns.
• The hourly RSI oscillator 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 upside momentum remains intact.
• The next key intermediate resistance to watch will be at 19640 which is defined by the 1.618 Fibonacci projection from 02 November 2015 low @12pm to the 03 November 2015 high @8am projected from the recent low of 03 November 2015 @8pm. Also, in terms of Elliot Wave, the Index is likely undergoing the bullish wave 3 of the larger degree wave 5/. This current medium-term bullish impulsive wave structure remains intact since the 29 September 2015 low.

Key levels (1 to 3 days)

Pivot (key support): 18930

Resistance: 19190, 19640 & 20050

Next support: 18600

Conclusion

As long as the 18930 daily pivotal support holds and a break above the 19190 range top is likely to add impetus for a further push up to target the next resistance at 19640 in the first instance.

However, failure to hold above the 18930 pivotal support may jeopardise the bullish tone to see a slide to test the ascending channel’s support now at 18600.

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