(Click to enlarge chart)
What happened yesterday
The Japan 225 (proxy for the Nikkei 225) has staged the expected bullish breakout from the bullish ‘Descending Wedge” chart configuration and traded higher during the European and U.S. sessions.
Earlier this morning, 09 September 2015, it continued to surge and it is now coming close to our expected short-term target at 18470.
Please click on this link for a recap on our previous weekly outlook.
- The Index has a bullish breakout from the “Descending Wedge” chart configuration which reinforces our recovery expectation for the Index.
- Based on the Elliot Wave Principal, the Index has started to shape a potential bullish impulsive 5- wave structure from the 08 September 2015 low of 17370 @2pm. From a lower degree, the Index is now undergoing a wave iii within a typical wave 1 that consists of i,ii,iii,iv & v.
- The intermediate resistance at 18470 (our short-term target as per highlighted in yesterday’s daily outlook) also confluences with the minimum wave iii Fibonacci projection of 1.00. The next resistance stands 18850/18950 which coincides closely with the standard wave iii Fibonacci projection of 1.618.
- The hourly (short-term) Stochastic oscillator is coming close to its extreme overbought level which suggests that the Index may stage a pull-back at the 18470 intermediate resistance before resuming its upside movement.
Key levels (1 to 3 days)
Pivot (key support): 17970
Resistance: 18470 & 18850/18950
Next support: 17370
Recovery scenario remains intact for the Index. We remain bullish and any potential pull-back is likely to be held by the adjusted daily pivotal support at 17970 before another rally to target 18850/18950 next.
On the other hand, a break below the 17970 pivotal support is likely to negate the bullish tone to see a slide to retest yesterday’s swing low at 17370.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.