nikkei 225 daily outlook tues 08 dec at support 1947019385 support with potential upturn 1789772015

(Click to enlarge chart)

What happened earlier

The Japan 225 (proxy for the Nikkei 225)  has sold off earlier this morning, 08 December 2015 as it shed 1.5% to hit a current low of 19473 as at 10.18 SGT.

Interestingly, this decline in price action has pull-backed into the medium-term intermediate support zone of 19600/19500 as per highlighted in our latest weekly strategy/outlook yesterday (click here for details).

Key elements

• The current decline in price action is now resting at the lower boundary of the bullish ascending channel (in dark blue) in place since 29 September 2015 low at around the 19473 level.
• The 19473 level also confluences with the 76.4% Fibonacci retracement of recovery seen from last Friday, 04 December 2015 low of 19385 to 07 December 2015 high @10am.
• Current price action has formed an impending bullish hourly “Hammer” candlestick pattern on the lower boundary (support) of the ascending channel and the hourly (short-term) Stochastic oscillator has dipped into its oversold region. These observations suggest that a potential bullish reversal in price action is round the corner.

Key levels (1 to 3 days)

Pivot (key support): 19385

Resistance: 19790 & 20050

Next support: 19190 (weekly pivot)

Conclusion

As long as the daily (short-term) pivotal support at 19385 holds, the Index is likely to see a potential recovery to retest yesterday’s minor swing high area at 19790 with a maximum limit set at the 20050 range top.

On the flipside, a break below the 19385 short-term pivotal support may put the bulls on hold to see a further slide to target the 19190 weekly pivotal support.

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