nikkei 225 daily outlook tues 22 sep potential decline below 18330 resistance 1370522015

(Click to enlarge charts) Key elements The Japan 225 (proxy for the Nikkei 225) is still being sandwiched within a range/impending bullish “Double Bottom” configuration […]

(Click to enlarge charts)

Key elements

The Japan 225 (proxy for the Nikkei 225) is still being sandwiched within a range/impending bullish “Double Bottom” configuration with key neckline resistance at 19190.
The range support is now at 17580 which is defined by the ascending trendline joining the lows of “Black Monday”, 24 August 2015 and 08 September 2015 @12pm.
The significant short-term resistance stands at 18330 which is defined by the pull-back resistance of (in dotted red) and the 61.8% Fibonacci retracement of the most recent down move from 18 September 2015 high @3am to the 21 September 2015 low @11am.
The hourly (short-term) Stochastic oscillator has reached its extreme overbought level which suggests limited upside potential for the Index.

Key levels (1 to 3 days)

Pivot (key resistance): 18330

Support: 17775 & 17580

Next resistance: 18660/18740

Conclusion

Even though the Japan 225 Index has managed to inch higher since yesterday but it is now coming close to its daily (short-term) pivotal resistance at 18330. As long as 18330 pivotal resistance is not surpassed, the Index may see another round of decline to retest 18 September 2015 low at 17775 and even the range support at 17580.

On the other hand, a break above the 18330 daily pivotal resistance is likely to see a squeeze up to retest the 09 September and 18 September 2015 swing highs at 18660/18740.

* Do note that the cash market is closed today and Wednesday, 23 August 2015 for public holidays.

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