nikkei 225 daily outlook wed 11 nov watch 19480 support for a potential final push up 1749512015

(Click to enlarge chart)

What happened yesterday

The Japan 225 (proxy for the Nikkei 225) has managed to surge to a new high yesterday (printed a high of 19770 on 10 November 2015) despite overnight weakness seen in the U.S. and European stock markets.

Key elements

• On the shorter-term, the Index has continued to evolve within a short-term bullish ascending channel (in orange) in place since 02 November 2015 low.
• The lower boundary (support) of the aforementioned short-term ascending channel stands at 19480 which also correspond with a Fibonacci cluster.
• The upper boundary (support) of the short-term ascending channel stands at 20000 which confluences closely with the upper boundary of a longer-term ascending channel (in dark blue) in place since 29 September 2015 at 20050 and the 0.618 Fibonacci projection (the standard 5^th wave target based on the Elliot Wave Principal) from 02 November 2015 low @11am to 09 November 2015 high @12pm projected from the 10 November 2015 low @2am.
• The 20050 level is a significant medium-term resistance as per highlighted in our latest weekly outlook/strategy (click here for details).
• The hourly (short-term) Stochastic oscillator still has some room left for further downside before reaching its extreme oversold region. This observation suggests a potential dip in the price action of Index.
• Based on the Elliot Wave Principal, the Index is now coming to the tail end of the medium-term bullish impulsive wave structure that started in the low of 29 September 2015  as it is now undergoing a potential final bullish wave 5  to complete the larger degree wave 5/ (1) before a multi-week pull-back/consolidation takes place

Key levels (1 to 3 days)

Pivot (key support): 19480

Resistance: 20000/20050

Next support: 19150

Conclusion

As long as the 19480 daily (short-term) pivotal support holds, the Index is likely to shape a potential final push up to target the 20000/20050 resistance.

On the flipside, failure to hold above the 19480 pivotal support may invalidate the bullish tone to see the start of a multi-week pull-back scenario for a slide to test the next support at 19150 in first step.

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