nikkei 225 daily outlook tues 03 may 2016 potential short term final push down in progress below 162

(Click to enlarge charts)

What happened earlier/yesterday

The Japan 225 Index (proxy for the Nikkei 225 futures) has traded sideways yesterday and the preferred potential short-term push down remains in progress. Please refer to this link for recap our latest weekly technical outlook/strategy published on Sunday.

*Japan cash stock market is closed for a public holiday today and tomorrow.

Key elements

• Yesterday price action’s advance has been capped by the median line of a bearish short-term descending channel in place since 27 April 2016.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely undergoing the a bearish wave 3/ downleg of a minor degree with a potential end target at 15480 which is defined by a Fibonacci projection cluster (3.618 + 0.382). Thereafter, a potential corrective snap-back rally/consolidation, wave 4/ is likely to occur (see 1 hour chart).
• The aforementioned Fibonacci projection cluster also confluences with the 15680/480 range support (08 April 2016 swing low area + ascending trendline from 12 February 2016 low (see 4 hour chart).
• The key short-term resistance stands at 16240 which is  the minor swing low areas of 18 April and 29 Aril 2016 as well as coincides closely with the 23.6% Fibonacci retracement of the recent decline from 25 April 2016 high to last Friday low of 15832.

Key levels (1 to 3 days)

Pivot (key resistance): 16240

Supports: 15840 & 15480/330

Next resistance: 16720 (weekly pivot)

Conclusion

Short-term technical elements remain bearish. As long as the 16240 daily short-term pivotal resistance is not surpassed, the Index is likely to shape a potential final push down to retest 15840 before target the 15480/330 support zone.

However, a clearance above the 16240 short-term pivotal resistance may negate the bearish tone to see a push up to test this week medium-term pivotal resistance at 16720.

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