nikkei 225 daily outlook thurs 16 june 2016 coming close to 15330 support where a potential short te

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What happened earlier/yesterday

The Japan 225 Index (proxy for the Nikkei 225 futures) has reacted as expected below the predefined 16100 short-term pivotal resistance as per highlighted in yesterday’s short-term technical outlook/strategy. It has inched lower in the yesterday’s U.S. session right after the release of U.S. central bank (FOMC) latest economic projections and press statement.

In today’s Asian session (16 June 2016), the Index has tumbled and it is now coming close to our expected short-term downside target/support at 15480/330 (printed a current intraday low of 15505) reinforced by the Bank of Japan’s latest decision to refrain from adding any new monetary stimulus

Please click on this link for a recap in our prior updated daily short-term technical outlook/strategy.

 Key elements

• Current price action is now coming close to a significant support of 15330 which is defined by the 07 April 2016 swing low, the lower boundary of a short-term descending channel in place since 10 June 2016 high at 16698 and a Fibonacci cluster at 15330/220 zone.
• The 4 hour Stochastic oscillator is now coming close to an extreme oversold level which suggests that downside momentum of price action is coming close to an “overstretched” level where the Index faces to risk of a “snap-back” rally.
• The short-term key resistance remains at 15900/16000 which is close to the pull-back resistance of the former minor triangle range’s support (depicted in purple, now the minor swing high areas of 14/15/16 June 2016 and the upper boundary of the short-term descending channel in place since 10 June 2016 high at 16698.
• Based on the Elliot Wave Principal and fractal analysis, the Index is coming close to a completion of the bearish impulsive wave 3 of a minor degree in place since 08 June 2016 high of 16854 with a projected target at 15330/220. These observations suggest that the Index may see an imminent short-term corrective “snap-rally” (wave 4) to retrace the recent decline.

Key Levels (1 to 3 days)

Intermediate support: 15330

Pivot (key support): 15220

Resistance: 15900/16000

Next support: 14780

Conclusion

Coming close to 15330 support where a potential short-term “snap-back rally” looms. As long as the 15220 daily short-term pivotal support holds, the Index is likely to shape a short-term “snap-back rally” towards the 15900/16000 resistance to retrace the recent decline from 08 June 2016 high.

On the other hand, failure to hold above the 15220 short-term pivotal support is likely to invalidate the preferred “snap-back” rally scenario to open up scope for a further drop towards the 12 February 2016 swing low of 14780.

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