nikkei 225 daily outlook tues 03 nov at 19190 range top for a potential slide 1713942015

(Click to enlarge charts)

Key elements

• Since the 24 October 2015 high, the Japan 225 (proxy for the Nikkei 225)  has continued to evolved in a short-term “Expanding Triangle” configuration with a horizontal range top (resistance) at 19190 and the lower limit (support) now at 18600.
• The aforementioned support of 18600 also confluences closely with the lower boundary of a bullish ascending channel in place since 29 September 2015 and a Fibonacci retracement cluster (click here for more details as per highlighted in our latest weekly outlook).
• Yesterday’s overnight price action has pushed up the Index close to the 19190 range top. In addition, the hourly (short-term) Stochastic oscillator has flashed a bearish divergence signal at its overbought region which suggests that the upside momentum of yesterday’s rally has abated and the Index now faces a risk of a pull-back.

Key levels (1 to 3 days)

Pivot (key resistance): 19190

Support: 18845 & 18600

Next resistance: 20050

Conclusion

Do take note that the cash market is closed for trading today for a public holiday where liquidity is expected to be lower in Asian trading hours.

As long as the 19190 daily (short-term) pivotal resistance is not surpassed, the Index is likely to shape a slide to target 18845 before the lower limit of the “Expanding Triangle” consolidation configuration at 18600.

However, a break above the 19190 pivotal resistance may see a further squeeze up towards the next resistance at 20050.

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